Problem #3-InterestCapitalization(20 Points! On November 1, 2006-Shalla Company contracted Pfeifer Construction Company to construct a building for$2,800,000 on land costing $200,000 (purchased from the contractor and included in the first payment.) e Shalla made the following payments to the construction company during 2007: o January 1, 2007-$420,000 o February 1, 2007 $600,000 o June 1, 2007 $1,080,000 o December 31, 2007 $900,000 o Total$3,000,000 Pfeifer Construction completed the building, ready for occupancy, on December 31 2007 Shalla had the following debt outstanding at December 31, 2007 Specific Construction Debt o ($1,500,000)-15%, 3 year note to finance purchase of land and construction of the building, dated December 31, 2006, with interest payable annually on December 31s . o Other Debt ($1,100,000) -10% 5 year note payable dated December 31, 2003, with interest payable annually on December 31st ($1,200,000)-12%, 10 year bonds issued December 31, 2002 with interest payable annually on December 31s . REQUIRED 1. Calculate Avoidable & Actual Interest (Show Your Work) 2. Prepare complete adjusting journal entry for 12/31107 to record Capitalized Interest I don't want all journal entries for all payments made-only the complete entry that shows capitalized interest Avoidable Interest Actual Interest Journal Entry