PART ONE-ESSAY QUESTION (17 POINTS) Question 1 (8 points) On March 1, 2021, Sinokrot Co contracted Nabali & Fares Construction Co. to construct a building for $2,000,000 on land costing $200,000 (purchased from the contractor and included in the first payment). Sinokrot made the following payments to the construction company during 2021. March 1, 2021 Expenditures April 1, 2021 June 1, 2021 July 31, 2021 $360,000 540,000 450,000 250,000 600,000 October 31, 2021 The automated plant-building was finished and ready for use on October 31,2017 Sinokrot had the following debt outstanding at December 31, 2017. 2021 Specific Construction Debt 2021 1. To finance construction of the building, a $600,000, 12% construction loan was taken out on March 1, 2021. The loan was repaid on October 31, 2021,648,000 Other Debts 2. On July 1, 2021, Sinokrot issued $2,000,000 bonds on a 5 year bonds at 9%. 900 90,000 3. On January 1, 2020, Sinokrot borrowed $500,000 on a 3-year loan at 8%. Required 40.000 a) Compute the weighted-average accumulated expenditures qualifying for capitalization of interest cost for 2021, using the following table. (5 points) Expenditures Capitalization Date Amount Period March 1, 2021 $360,000 2/12 April 1, 2021 540,000 7/12 June 1, 2021 450,000 5/12 July 31, 2021 250,000 3/12 October 31, 2021 600,000 0/12 Total Weighted-Average Accumulated Expenditures Weighted -Average Accumulated Expenditures 240,000 315,000 12%, 500 62,500 0 805,000 b) Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any. (3 points) Avoidable 72,000+10,682,660 Acteal 178, o Account DR CR Building (capitalized) 82,660 Interest expense cash 95,340 178,000