Computing and Recording Interest Capitalization The following information is from Bowin Inc. for a long-term construction project that is expected to be completed in January 2021. The construction project is for a building intended for the company's own use. The capital expenditure on January 1, 2020, is for the purchase of land for the building site. No new construction loans were opened for the project in 2020. All debt was outstanding for the full year. Capital Expenditures for 2020 Date Jan. 1, 2020 Amount $18,000 Mar. 31, 2020 540,000 June 30, 2020 1,080,000 Nov. 30, 2020 540,000 Outstanding Debt in 2020 Debt Debt Amount Interest Rate Note payable $600,000 8% Note payable 480,000 8% Bond payable 1,200,000 10% Note payable 300,000 9% Answer the following questions: a. Compute interest to be capitalized and the interest to be expensed in 2020. b. Prepare the entry to record the construction expenditures and interest for 2020. c. Prepare the entry for depreciation in 2021 assuming that the project is completed on January 1, 2021. Assume that the building has a useful life of 30 years, and that the company uses the straight-line depreciation method. Note: Answer the following questions, carrying all decimals in calculations; round final answers to the nearest dollar. Note: Answer the following questions, carrying all decimals in calculations; round final answers to the nearest dollar. a. Amount of interest to be capitalized $ 91,224 Amount of interest to expense b. Account Name Land Construction in Process Interest Expense Cash and Payables C. $ 142,176 Dr. Cr. 18,000 0 2,071,224 x 0 142,176 0 0 2,231,400 x Account Name Dr. Cr. Depreciation Expense 69,041 x 0 Accumulated Depreciation 0 69,041 x