On January 1, 2020, Green Farm Construction Inc., a publicly accountable entity, started the construction of a building. The building was completed on December 31, 2020, and was put into use on that date.

The following direct costs in the construction of the building were paid on the following dates:

January 1, 2020	$150,000
February 1, 2020	$ 95,000
May 15, 2020	$210,000
June 1, 2020	$ 45,000
July 1, 2020	$ 75,000
August 15, 2020	$ 60,000
December 1, 2020	$225,000

The companys borrowings are as follows:

1. A $200,000, 8.5%, one-year note dated February 1, 2020 this note relates specifically to the building.

2. Bonds payable in the amount of $7,500,000 issued at face value the annual interest on these bonds is 9%. The bonds were outstanding throughout the year.

3. A bank loan payable in the amount of $4,500,000 bearing interest at 7% the loan was outstanding throughout the year.

Required:

1. What amount of interest should be capitalized for the fiscal year ended December 31, 2020? (12 Marks)
2. Indicate the actual amount of interest expense incurred by Green Farm before capitalization of the borrowing costs. (2 Marks)
3. Record the journal entry for the capitalization of borrowing costs on the building. (2 Marks)
4. What is the total balance of the buildings asset on Green Farms books? (2 Marks)