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On October 1, 2024, GreenEco Corporation contracted Blue Builders to construct a new eco-friendly shopping mall for $6,000,000. GreenEco made payments for the construction as

  • On October 1, 2024, GreenEco Corporation contracted Blue Builders to construct a new eco-friendly shopping mall for $6,000,000. GreenEco made payments for the construction as follows: December 1, $1,200,000, February 1, $1,800,000, and December 31, $3,000,000. The construction was completed, and the shopping mall was ready for operation on December 31, 2024. GreenEco had the following outstanding debt as of December 31, 2024:
    i) A 10% three-year note to finance construction of the shopping mall, dated December 31, 2023, with interest payable annually on December 31. Principal amount: $3,000,000.
    ii) A 8% five-year note payable, dated December 31, 2022, with interest payable annually on December 31. Principal amount: $2,000,000.

    Required:
    i) Determine the amount of interest to be capitalized in 2024 in relation to the construction of the shopping mall.
    ii) Prepare journal entries for GreenEco Corporation during 2024.

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