During 2012, P & P Products finished the construction of a new warehouse in North Carolina. Construction began on January 1, 2011. The cost of the new warehouse was $3M with costs incurred evenly throughout the construction. The following information was provided:
P & P Products incremental interest rate is 10%
Actual interest incurred during 2012 was $135,000
The average accumulated expenditures was $1.5M
Required: Prepare the entry to record the interest capitalized in 2012.