Interest During Construction Jones Company is constructing a production complex that qualifies for interest capitalization. The following information is available: Capitalization period: January 1, 2016, to June 30, 2017 - Expenditures on project 2016: January 1 May 1 October 1 $480,000 357,000 480,000 2017: March 1 1,536,000 June 30 708,000 . Amounts borrowed and outstanding: $1.4 million borrowed at 10%, specifically for the project $7 million borrowed on July 1, 2015, at 12% $18 million borrowed on January 1, 2011, at 6% Required Note: Round all final numeric answers to the nearest dollar. 1. Compute the amount of interest costs capitalized each year. Capitalized interest, 2016 Capitalized interest, 2017 2. If t is assumed that the production complex has an estimated life of 25 years and a residual value of so, compute the straight-line depreciation in 2017. income than if it 3. Since GAAP requires accrual accounting, if a company capitalizes interest during the construction period it will report had not capitalized interest. In future periods, the same company will report income than if it had not capitalized Interest