Part 2(B): Acquisition, Valuation and Disposal of PPE | Capitalized Interest Use the information below to answer all questions in this section. On 1/1/2022 Square Co. contracted Triangle Co. to construct a building for $800,000. The first payment includes the cost of land, which is $70,000. Triangle Co. completed the building, ready for occupancy, on 12/31/2022. During the course of 2022, Square Co. made the following cash payments to Triangle Co: Date of Amount of Payment Payment 3/1 $200,000 4/30 $100,000 7/1 $325,000 12/1 $175,000 TOTAL $800,000 Square Co. had the following debt outstanding at 12/31/2022: Specific Construction Debt $100,000 8% 2-year note, dated January 1, 2022, with interest payable annually on December 31 Other Debt $300,000 10%, 10-year note, dated December 31, 2018, with interest payable annually on December 31 20%, 8-year note, dated December 31, 2019, with interest payable annually on $700,000 December 31 What adjusting journal entry Square Co. will record in order to capitalize interest and recognize interest expense, if any, on December 31st? O Dr. Building $60,771 Dr. Interest Expense $117,229 Cr. Cash $178,000 Dr. Building $178,000 Cr. Cash $178,000 Dr. Interest Expense $60,771 Dr. Building $117,229 Cr. Cash $178,000 Dr. Interest Expense $178,000 Cr. Cash $178,000