Kobe Company began constructing a building for its own use in February 20X1. During 20X1, Kobe incurred interest of $70,000 on specific construction debt and $15,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 20X1 was $60,000.

Required:

1. What amount of interest should Kobe capitalize? Prepare the journal entry to record payment of the interest.

2. If interest computed on the weighted-average amount of accumulated expenditures for the building during 20X1 was instead $90,000, what amount of interest should Kobe capitalize?