On December 31, 2024, Blue Inc. borrowed $1,170,000 at 13% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: June 1, $468,000; July 1, $702,000; September 1, $1,404,000; December 1, $702,000. The building was completed in April 2026. Additional information is provided as follows: 1. Other debt outstanding 2. 10-year, 11% bond, dated December 31, 2018, interest payable annually 15-year, 13% note, dated December 31, 2012, interest payable annually Interest revenue earned in 2025 $11,700,000 $2,925,000 $7,020 (a) (b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2025. (Round answers to O decimal places, e.g. 5,125. 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. List all debit entries before credit entries.)
On December 31, 2024, Blue Inc. borrowed $1,170,000 at 13% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: June 1, $468,000; July 1, $702,000; September 1, $1,404,000; December 1, $702,000. The building was completed in April 2026. Additional information is provided as follows: 1. Other debt outstanding 2. 10-year, 11% bond, dated December 31, 2018, interest payable annually 15-year, 13% note, dated December 31, 2012, interest payable annually Interest revenue earned in 2025 $11,700,000 $2,925,000 $7,020 (a) (b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2025. (Round answers to O decimal places, e.g. 5,125. 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. List all debit entries before credit entries.)
Chapter3: Income Sources
Section: Chapter Questions
Problem 43P
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Transcribed Image Text:On December 31, 2024, Blue Inc. borrowed $1,170,000 at 13% payable annually to finance the construction of a new building. In
2025, the company made the following expenditures related to this building: June 1, $468,000; July 1, $702,000; September 1,
$1,404,000; December 1, $702,000. The building was completed in April 2026. Additional information is provided as follows:
1.
Other debt outstanding
2.
10-year, 11% bond, dated December 31, 2018, interest payable annually
15-year, 13% note, dated December 31, 2012, interest payable annually
Interest revenue earned in 2025
$11,700,000
$2,925,000
$7,020
(a)
(b)
Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31,
2025. (Round answers to O decimal places, e.g. 5,125. 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. List all debit entries before credit entries.)
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