E10-8 (Capitalization of Interest) On December 31, 2014, Tsang Inc. borrowed HK$3,000,000 at 12% pay able annually to finance the construction of a new building. In 2015, the company made the following expenditures related to this building March 1, HK$360,000: June 1, HK$600,000; July 1, HK$1,500,000; December 1, HK$1,200,000. Additional information is provided as follows. 1. Other debt outstanding 10-year, 11% bond, December 31, 2005, interest payable annually HK$4,000,000 6-year, 10% note, dated December 31, 2012, interest payable annually HK$1,600,000 2. March 1, 2015, expenditure included land costs of HKS150,000 3. Interest revenue eamed in 2015 on funds related to specific borrowing HKS49,000 Instructions (a) Determine the amount of interest to be capitalized in 2015 in relation to the construction of the building (b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2015