Ivaylo Company had been constructing an asset for its own use. In connection with the construction, Ivaylo Company has been capitalizing interest on expenditures for this asset since construction began. The following costs were incurred:

April 1: 1,000,000; June 1: 600,000; July 1: 2,000,000; Oct 1: 2,200,000; Dec 1: 1,200,000; Dec 31: 700,000

Specific Construction Debt: 16%, $1,200,000 note

Other Debt: 10%, $750,000 short-term note payable; 12%, mortgage payable of $1,500,000

Instructions: (a) Compute the interest to be capitalized. (b) Record all journal entries for sonstruction costs and interest costs.