Exercise 10-8 On December 31, 2014, Tsang Inc. borrowed HK$3,000,000 at 12% payable annually to finance the construction of 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. Other debt outstanding 10-year, 11% bond, December 31, 2008, interest payable annually 6-year, 10% note, dated December 31, 2012, interest payable annually March 1, 2015, expenditure included land costs of HK$150,000 Interest revenue earned in 2015 on funds related to specific borrowing 1. HK$4,000,000 HK$1,600,000 2. 3. HK$49,000 Determine the amount of interest to be capitalized in 2015 in relation to the construction of the building. Amount of interest to be capitalized HKS SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2015 SHOW LIST OF ACCOUNTS LINK TO TEXT