Question

Prepare journal entries for the following select transactions for Be-Fit Corporation. In addition to completing the journal entries, include a separate sheet showing all work clearly labeled by date and description for partial credit.

01/01/2017-12/31/2017: BeFit borrowed $7 million at 10% on 1/1/17 to build the new recreation center, with principal and interest to be paid at maturity in 2 years. The building is expected to take 18 months to complete. The following are the cash expenditures for the construction of the building during 2017.

January 1, 2017	$1,400,000
April 1, 2017	$1,850,000
October 1, 2017	$1,100,000
December 31, 2017	$1,000,000

12/31/2017: Prepare any necessary adjusting entries at year-end.

01/01/2018-06/30/2018: Construction on the recreation center was completed on June 30, 2018, with the following construction expenditures made during 2018. The building will be depreciated for 20 years, with a $500,000 residual value.

March 1, 2018	$1,000,000
June 30, 2018 (building complete)	$1,200,000

12/31/2018: Be-Fit pays back the loan in full. Also, prepare any necessary adjusting entries at year-end. Be-Fit is depreciating the building and equipment using the straight-line method and is depreciating the van using the double-declining-balance method.

12/31/2019: Prepare any necessary adjusting entries at year-end.

Answer 1