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On April 1, 2024, GreenBuild Inc. contracted Blue Builders to construct a new sustainable office complex for $5,500,000. GreenBuild made payments for the construction as

  • On April 1, 2024, GreenBuild Inc. contracted Blue Builders to construct a new sustainable office complex for $5,500,000. GreenBuild made payments for the construction as follows: June 1, $1,100,000, August 1, $1,650,000, and December 31, $2,750,000. The construction was completed, and the office complex was ready for occupation on December 31, 2024. GreenBuild had the following outstanding debt as of December 31, 2024:
    i) A 9% four-year note to finance construction of the office complex, dated December 31, 2023, with interest payable annually on December 31. Principal amount: $2,500,000.
    ii) A 7% six-year note payable, dated December 31, 2022, with interest payable annually on December 31. Principal amount: $1,500,000.

    Required:
    i) Determine the amount of interest to be capitalized in 2024 in relation to the construction of the office complex.
    ii) Prepare journal entries for GreenBuild Inc. during 2024.

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