(Answered) Question - during 2015 j amp j completed the construction

Accounting

Question - During 2015 J & J completed the construction of a new warehouse in the North Carolina. Construction began on January 1, 2014. The cost of the new warehouse was $3M with the cost incurred evenly throughout the construction.

The following information is provided:

J & J incremental interest rate is 8%

Actual interest incurred during 2015 was $135,000.

The average accumulated expenditures was $1,5M

Requirement:

a. How much interest should be calculated?

b. What is the entry to capitalize the interest?

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