On December $31,2019,$ Cheyenne Inc. borrowed $$3,240,000$ at $13\%$ payable annually to finance the construction of a new building. In

$2020,$ the company made the following expenditures related to this building: March $1,$$$388,800$; June $1,$$$648,000$; July $1,$

$$1,620,000$; December $1,$$$1,620,000.$ The building was completed in February $2021.$ Additional information is provided as follows.

Other debt outstanding

$10-$year, $14\%$ bond, December $31,2013,$ interest payable annually

$$4,320,000$

$6-$year, $11\%$ note, dated December $31,2017,$ interest payable annually $$1,728,000$

March $1,2020,$ expenditure included land costs of $$162,000$

Interest revenue earned in $2020$

$$52,920$

$($a$).$

$($b$)$

Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December $31.$

$($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 $0$ for the amounts.$)$

Date

Account Titles and Explanation

Debit

Credit

December $31,2020$