Benson Construction is in the second year of a three-year project to build a new office complex consisting of several two- and three-story buildings. In year 1 , Benson reported gross profit on the project of $1.2 million. For year 2 , the project accountant calculated that the revenues were $10 million and costs were $10.5 million for the year. How should Benson's accountant record the year 2 activity? Record a loss of $500,000 in year 2. Record a loss of $700,000 in year 2 . Record a deferred loss of $500,000 in year 2 because Benson expects a profit in year 3 of $2 million. Record a change in accounting principle in year 2, with a debit to retained earnings as of the beginning of year 2, and switch to the cost recovery method