King Company began constructing a building for its own use in January 2015.During 2015,King incurred interest of $60,000 on specific construction debt and $12,000 on other borrowings.Interest computed on the weighted-average amount of accumulated expenditures for the building during 2015 as $50,000.
Required:
a.What amount of interest should King capitalize?
b.Prepare the journal entry to record payment of the interest.

Question

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The Answer of King Company began constructing a building for its own use in January 2015.During 2015,King incurred interest of $60,000 on specific construction debt and $12,000 on other borrowings.Interest computed on the weighted-average amount of accumulated expenditures for the building during 2015 as $50,000.
Required:
a.What amount of interest should King capitalize?
b.Prepare the journal entry to record payment of the interest.

King Company Began Constructing a Building for Its Own Use