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On January 1, 2016, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2017. Expenditures on the project were as follows:
January 1, 2016
$341,000
September 1, 2016
$507,000
December 31, 2016
March 31, 2017
September 30, 2017
Dreamworld had $6,900,000 in 12% bonds outstanding through both years.
The average accumulated expenditures for 2017 by the end of the construction period was:
$1,100,750.$2,203,000.$1,416,200.$1,754,200.
Purchases of merchandise on account during the year totaled $845,000. Merchandise costing $902,000 was sold on account for $1,420,000. Prepare the journal entries to record these transactions.
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