Problem \#2 - Interest Capitalization (25 Points) - On November 1, 2006 - Shalla Company contracted Pfeifer Construction Company to construct a building for $5,600,000 on land costing $400,000 (purchased from the contractor and included in the first payment.) - Shalla made the following payments to the construction company during 2007: - January 1,2007=$840,000 - February 1,2007=$1,200,000 - June 1,2007=$2,160,000 - December 31,2007=$1,800,000 - Total =$6,000,000 - Pleifer Construction completed the building, ready for occupancy, on December 312007. - Shalla had the following debt outstanding at December 31, 2007 - Specific Construction Debt - ($3,000,000)15%,3 year note to finance purchase of land and construction of the building, dated December 31,2006 , with interest payable annually on December 31. - Other Debt - ($2,200,000)10%,5 year note payable dated December 31,2003 , with interest payable annually on December \( 31^{\perp 1} \). - ($2,400,000)12%,10 year bonds issued December 31,2002 with interest payable annually on December 31tht. REQUIRED: 1. Calculate Avoidable \& Actual Interest 2. Prepare complete adjusting journal entry for 12/31/07 to record Capitalized Interest, I don't want all journal entries for all payments made - only the complete entry that shows capitalized interest