The following information is from Bowin Inc. for a long-term construction project that is expected to be completed in January of next year. The construction project is for a building intended for the company's own use. The capital expenditure on January 1 of the current year is for the purchase of land for the building site. No new construction loans were opened for the project during the year. All debt was outstanding for the full year. Capital Expenditures for Current Year Actual Expenditures Date Jan. 1 Mar. 31 June 30 Nov. 30 $102,000 3,060,000 6,120,000 3,060,000 Debt Outstanding Debt in Current Year Debt Amount Interest Rate Note payable $3,400,000 8% Note payable 2,720,000 8% Bond payable 6,800,000 10% Note payable 1,700,000 9% Compute Interest to Capitalize and Expense Journal Entry in Year 1 Journal Entries in Year 2 c. Assume that the project is completed on January 1 of the next year. (1) Prepare the entry to transfer costs from construction in process to property and equipment. (2) Prepare the annual entry for depreciation for that next year, assuming that the building has a useful life of 30 years with no salvage value, and that the company uses the straight-line depreciation method. 1. Depreciation Expense Account Name Accumulated Depreciation To record cost transfer Dr. 425,222 Cr. 0 0 425,222 x 2. Account Name Dr. Cr. Depreciation Expense 425,222 0 x Accumulated Depreciation 0 425,222 x To record annual depreciation