Interest During Construction Alta Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2019, to June 30, 2020 Expenditures on project: 2019: January 1 May 1 $492,000 489,000 October 1 612,000 2020: March 1 June 30 Amounts borrowed and outstanding: 1,548,000 612,000 $1.6 million borrowed at 12%, specifically for the project $8 million borrowed on July 1, 2018, at 14% $16 million borrowed on January 1, 2017, at 8% Required: Note: Round all final numeric answers to two decimal places. 1. Compute the amount of interest costs capitalized each year. Capitalized interest, 2019 116,520 x Capitalized interest, 2020 2. If it is assumed that the production complex has an estimated life of 25 years and a residual value of $0, compute the straight- line depreciation in 2020. $ 3. Since GAAP requires accrual accounting, if a company capitalizes interest during the construction period it will report higher income than if it had not capitalized interest. In future periods, the same company will report lower income than if it had not capitalized interest.