# Blank built a new plant for its own use on land that it acquired in 2015...

###### Question:

1. Blank built a new plant for its own use on land that it acquired in 2015 with a cost of $500,000. Construction commenced on January 1, 2017 and was completed on December 31, 2017. Reno had the following debt during the construction period: Construction Loan for the new plant =$500,000 @ 7%

Other unrelated debt:

Bank Loan = $1,000,000 @ 5% Construction Expenditures (excluding land): July 1 =$ 1,000,000

1. Prepare the journal entry to capitalize the interest on the construction of the building assuming interest expense for all the debt has already been recorded.

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