F10 - 9 ( Capitalization of Interest ) On July 31 , 2007 , Amsterdam Company engaged Minsk Tooling* Company to construct a special - purpose piece of factory machinery . Construction was begun immediately and was completed on November 1 , 2007 . To help finance construction , on July 31 Amsterdam issued a $300, 000 , 3 - year , 12% note payable at Netherlands National Bank , on which interest is payable each July 31 . $ 200 , 000 of the proceeds of the note was paid to Minsk on July 31 . The remainder of the proceeds was temporarily invested in short -term marketable* securities ( trading securities ) at 10 % until November 1 . On November 1 , Amsterdam made a final $100, 000 payment to Minsk . Other than the note to Netherlands , Amsterdam's only* outstanding liability at December 31 , 2007 , is a $30 , 000 , 8% , 6 - year note payable , dated January 1 , 2004 , on which interest is payable each December 31 . Instructions a ) Calculate the interest revenue , weighted - average accumulated expenditures , avoidable interest , and total interest cost to be capitalized during 2007 . Round all computations to the nearest dollar . 6 ) Prepare the journal entries needed on the books of Amsterdam Company at each of the following dates . 1 . July 31 , 2007 . 2 . November 1 , 2007 . 3 . December 31 , 2007