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Question - During 2015 J & J completed the construction of a new warehouse in the North Carolina. Construction began on January 1, 2014. The cost of the new warehouse was $3M with the cost incurred evenly throughout the construction.
The following information is provided:
J & J incremental interest rate is 8%
Actual interest incurred during 2015 was $135,000.
The average accumulated expenditures was $1,5M
Requirement:
a. How much interest should be calculated?
b. What is the entry to capitalize the interest?
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