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Question
King Company began constructing a building for its own use in January 2011. During 2011, King incurred interest of $60,000 on specific construction debt and $12,000 on other borrowings. Interest computed on the weighted-average amount of accumulated expenditures for the building during 2011 as $50,000.
Required:
a. What amount of interest should King capitalize?
b. Prepare the journal entry to record payment of the interest.
Answer
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