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On 3/1/12, Celine Company contracted with Axle Construction to have a new building constructed on its own land for $3,000,000. Celine made payments to Axle as follows: 5/30/12 $1,200,000 7/30/12 1,000,000 9/30/12 800,000 $3,000,000 Celine had long-term debt outstanding at the time of the construction (a 12%, 5-year note payable of $1,000,000, dated 4/1/08, with interest payable on 4/1, and a 10%, 10-year bond issue of $1,500,000, sold a par on 6/30/04, with interest payable semiannually on 6/30 and 12/31), but on 3/31/12, Celine borrowed an additional $1,000,000 at 9% to support construction of the building. Construction was completed and the building was ready for occupancy on September 30, 2012.

On 3/1/12, Celine Company contracted with Axle Construction to have a new building constructed on its own land for $3,000,000.  Celine made payments to Axle as follows:

5/30/12        $1,200,000
7/30/12          1,000,000
9/30/12             800,000
$3,000,000

Celine had long-term debt outstanding at the time of the construction (a 12%, 5-year note payable of $1,000,000, dated 4/1/08, with interest payable on 4/1, and a 10%, 10-year bond issue of $1,500,000, sold a par on 6/30/04, with interest payable semiannually on 6/30 and 12/31), but on 3/31/12, Celine borrowed an additional $1,000,000 at 9% to support construction of the building.

Construction was completed and the building was ready for occupancy on September 30, 2012.

Required:
What amount of interest (if any) will Celine capitalize in 2012?
What is the balance of the Buildings and Interest Expense accounts at 12/31/12?
What adjusting entry would Celine make at 12/31/12 if Celine were to depreciate this building over 30 years, using straight-line method and assuming 100,000 salvage value?

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