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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.)

FINANCIAL ACCOUNTING
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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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.)
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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