On December 31, 2019, Indigo Inc. borrowed $3,120,000 at 12% payable annually to finance the...
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On December 31, 2019, Indigo Inc. borrowed $3,120,000 at 12% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $374,400; June 1, $624,000; July 1, $1,560,000; December 1, $1,560,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 13% bond, December 31, 2013, interest payable annually $4,160,000 6-year, 10% note, dated December 31, 2017, interest payable annually $1,664,000 2. March 1, 2020, expenditure included land costs of $156,000 3. Interest revenue earned in 2020 $50,960
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 O for the amounts.) ate Account Titles and Explanation Debit Credit :r 31, 2020 190320 Interest Expense 3928080 cash 4118400
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