Question 2 Partially correct Mark 13.00 out of 17.00 F Fag question Computing and Recording Interest Capitalization The following information is from Bowin Inc. for a long term construction project that is expected to be completed in January 2021. The construction project is for a building intended for the company's own use. The capital expenditure on January 1, 2020, Is for the purchase of land for the building site. No new construction loans were opened for the project in 2020. All debt was outstanding for the full year. Capital Expenditures for 2020 Date Amount 1.2020 $36.000 Mar 31, 2020 100.000 June 30, 2020 2.160.000 Nov. 30, 2000 100.000 Outstanding Debt in 2020 Det Debt Amount interest Rate Note pale 51.200.000 Note payable 960.000 Bond payable 2.400.000 Non payable 600.000 94 Answer the following questions: a. Compute interest to be capitained and the interest to be expensed in 2020 b. Prepare the entry to record the construction expenditures and interest for 2020 c. Prepare the entry for depreciation in 2021 assuming that the project is completed on January 1, 2021. Assume that the building has a useful life of 30 years, and that the company uses the straight line depreciation method Note: Do not round until your final answers, then round to nearest whole number. a. Amount of interest to be capitalized $ Amount of interest to expense $ 466,800 x 466,800 x b. Account Name Cr. 0 Land Construction in Process Interest Expense Cash and Payables Dr. 36,000 4,356,000 X 284,554 x 0 0 0 4,822,800 c. Account Name Depreciation Expense Accumulated Depreciation Dr. 150,079 Cr. 0 07 150,079 Check Question 2 Partially correct Mark 13.00 out of 17.00 F Fag question Computing and Recording Interest Capitalization The following information is from Bowin Inc. for a long term construction project that is expected to be completed in January 2021. The construction project is for a building intended for the company's own use. The capital expenditure on January 1, 2020, Is for the purchase of land for the building site. No new construction loans were opened for the project in 2020. All debt was outstanding for the full year. Capital Expenditures for 2020 Date Amount 1.2020 $36.000 Mar 31, 2020 100.000 June 30, 2020 2.160.000 Nov. 30, 2000 100.000 Outstanding Debt in 2020 Det Debt Amount interest Rate Note pale 51.200.000 Note payable 960.000 Bond payable 2.400.000 Non payable 600.000 94 Answer the following questions: a. Compute interest to be capitained and the interest to be expensed in 2020 b. Prepare the entry to record the construction expenditures and interest for 2020 c. Prepare the entry for depreciation in 2021 assuming that the project is completed on January 1, 2021. Assume that the building has a useful life of 30 years, and that the company uses the straight line depreciation method Note: Do not round until your final answers, then round to nearest whole number. a. Amount of interest to be capitalized $ Amount of interest to expense $ 466,800 x 466,800 x b. Account Name Cr. 0 Land Construction in Process Interest Expense Cash and Payables Dr. 36,000 4,356,000 X 284,554 x 0 0 0 4,822,800 c. Account Name Depreciation Expense Accumulated Depreciation Dr. 150,079 Cr. 0 07 150,079 Check
