On December 31, 2021, Jordan Co. borrowed $1,500,000 at 12% payable annually to finance
the construction of a new building. In 2022, the company made the following expenditures
related to the building:
1-Mar		180,000
1-Jun		300,000
1-Jul		750,000
1-Dec		750,000
The building was completed in February 2023.
Jordan had the following other debt outstanding:
10 year bond	13%	Interest payable annually		2,000,000
6 year note	10%	Interest payable annually		800,000
The March 1 expenditure included land costs of				75,000
Interest revenue earned during 2022				24,500
Determine the amount of interest capitalized in 2022 on this building.
Prepare the journal entry to record the capitalization of interest and the recognition of
interest expense if any at December 31, 2022. STEP 1 determine in the asset qualifies for capitalization of interest Step 2 Determine the capitalization period step 3 compute the weighted average accumulated expenditures step 4 Compute avoidable interest step 5 Compute actual interest expense fir the year step 6 Capitalize whichever is less-avoidable interest or actual interest Journal for step 6 debit /credit