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On December 31, 2019, Splish Inc. borrowed $4,080,000 at 12% payable annually to finance the construction of a new building. In 2020, the company made
On December 31, 2019, Splish Inc. borrowed $4,080,000 at 12% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $489,600;June 1, $816,000: July 1, $2,040,000: December 1. $2,040,000. The building was completed in February 2021. Additional information is provided as follows. 1. $5,440,000 Other debt outstanding 10-year, 13% bond, December 31, 2013, interest payable annually 6-year, 10% note, dated December 31, 2017, interest payable annually March 1, 2020, expenditure included land costs of $204,000 Interest revenue earned in 2020 $2,176,000 2. 3. $66,640 Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit December 31, 2020 Buildings 248 Interest Expense Cash
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