On December 31, 2024, Tamarisk Inc. borrowed $3,960,000 at 13% payable annually to finance the construction of a new building. In2025, the company made the following expenditures related to this building: March 1, $475,200; June 1, $792,000; July 1,$1,980,000; December 1, $1,980,000. The building was completed in February 2026. Additional information is provided as follows.1.2.3.(a)Other debt outstanding:10-year, 14% bond, December 31, 2018, interest payable annually6-year, 11% note, dated December 31, 2022, interest payable annuallyMarch 1, 2025, expenditure included land costs of $198,000.Interest revenue of $64,680 earned in 2025.Your answer is correctDetermine the amount of interest to be capitalized in 2025 in relation to the construction of the building.The amount of interest $eTextbook and MediaDatePrepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31,2025. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "NoEntry" for the account titles and enter O for the amounts. List all debit entries before credit entries)December 31, 2025Account Titles and ExplanationInterest ExpenseBuildings261690eTextbook and Media$5,280,0002,112,000Interest PayableDebitCredit

A journal entry is a basic accounting record that is used to chronologically track financial…

2025, the company made the following expenditures related to this building: March 1, $475,200; June 1. $ $1,980,000, December 1, $1,980,000. The building was completed in February 2026. Additional informati 1. Other debt outstanding: 10-year, 14% bond, December 31, 2018, interest payable annually 6-year, 11% note, dated December 31, 2022, interest payable annually 2. March 1, 2025, expenditure included land costs of $198,000. 3. Interest revenue of $64,680 earned in 2025. $5,280,000 2,112,000

2025, the company made the following expenditures related to this building: March 1, $475,200; June 1. $ $1,980,000, December 1, $1,980,000. The building was completed in February 2026. Additional informati 1. Other debt outstanding: 10-year, 14% bond, December 31, 2018, interest payable annually 6-year, 11% note, dated December 31, 2022, interest payable annually 2. March 1, 2025, expenditure included land costs of $198,000. 3. Interest revenue of $64,680 earned in 2025. $5,280,000 2,112,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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