On December 31, 2019, Redhawk Realty borrowed $1,000,000 at 7% payable anually to finance the construction of a new building. In 2020 the company had the following expenditures related to this project:

June 1, $400,000

July 1, $600,000

September 1, $1,200,000

December 1, $600,000

The project was finally done in April 2021.

The companies other debt was as follows:

10-year 8% bond, dated December 31, 2013, interest payable annually for $10,000,000

15 year 10% note, dated December 31, 2007, interest payable annually for $2,500,000

Interest revenue earned in 2020: $6,000

A) Determine the amount of interest to be capitalized in 2020 related to the construction of the building

B) Prepare the Journal Entries to record the interest capitalization and the recognition of interest expense, if any, at December 31, 2020