Question One On December 31, 2018, Green Group borrowed USD 320,000 at 8% payable annually...
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Question One On December 31, 2018, Green Group borrowed USD 320,000 at 8% payable annually to finance the construction of a new building. In 2019, the company made the following expenditures related to this building: March 1, USD 48,000; June 1, USD 120,000; July 1, USD 80,000; and December 1, USD 96,000. Additional information is provided as follows. Other debt outstanding 10-year, 8% bond, December 31, 2016, interest payable annually 6-year, 8% note, dated December 31, 2016, interest payable annually March 1, 2012, expenditure included land costs of USD 15,000 Interest revenue earned in 2019 on funds related to specific borrowing USD 370,000 USD 120,000 USD 2,500 Required: a. Determine the amount of interest to be capitalized in 2019 in relation to the construction of the building. b. Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2019
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