Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)DateAccount Titles and ExplanationDebitCreditDecember 31, 2020 On December 31, 2019, Oriole Inc. borrowed $3,060,000 at 13% payable annually to finance the construction of a new building. In2020, the company made the following expenditures related to this building: March 1, $367,200; June 1, $612,000; July 1,$1,530,000; December 1, $1,530,000. The building was completed in February 2021. Additional information is provided as follows.1.2.3.(a)Other debt outstanding10-year, 14% bond, December 31, 2013, interest payable annually6-year, 11% note, dated December 31, 2017, interest payable annuallyMarch 1, 2020, expenditure included land costs of $153,000Interest revenue earned in 2020흐Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.The amount of interest $Save for Later$4,080,000$1,632,000202215$49,980Attempts: 0 of 1 usedSubmit Answer

Capitalization of interest The amount of interest cost that theoretically could have been avoided if…

Answered: On December 31, 2019, Oriole Inc.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
December 31, 2020

On December 31, 2019, Oriole Inc. borrowed $3,060,000 at 13% payable annually to finance the construction of a new building. In
2020, the company made the following expenditures related to this building: March 1, $367,200; June 1, $612,000; July 1,
$1,530,000; December 1, $1,530,000. The building was completed in February 2021. Additional information is provided as follows.
1.
2.
3.
(a)
Other debt outstanding
10-year, 14% bond, December 31, 2013, interest payable annually
6-year, 11% note, dated December 31, 2017, interest payable annually
March 1, 2020, expenditure included land costs of $153,000
Interest revenue earned in 2020
흐
Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
The amount of interest $
Save for Later
$4,080,000
$1,632,000
202215
$49,980
Attempts: 0 of 1 used
Submit Answer

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