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On December 31, 2024, Blue Inc. borrowed $4,320,000 at 13% payable annually to finance the construction of a new building. In 2025, the company
On December 31, 2024, Blue Inc. borrowed $4,320,000 at 13% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: March 1, $518,400; June 1, $864,000; July 1, $2,160,000; December 1, $2,160,000. The building was completed in February 2026. Additional information is provided as follows. 1 Other debt outstanding 10-year, 14% bond, December 31, 2018, interest payable annually 6-year, 11% note, dated December 31, 2022, interest payable annually $5,760,000 2,304,000 2. March 1, 2025, expenditure included land costs of $216,000 3. Interest revenue of $70,560 earned in 2025. Prepare the journal entry to record the capitalization of interest and the recognition of interent expense, if any, at December 31, 2025. (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. List all debit entries before credit entries) ite r 31,2025 Account Titles and Explanation Buildings Interest Expense Cash Debit 285480 Credit 285480 285480
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