Interest During Construction Snowbird Company is constructing a buliding that qualifies for interest capitalization. It is built between January 1 and December 31,2019 . Snowbird made the following expenditures related to this building: The company borrowed $500,000 at 12% to help finance the project, In addition, Snowbird had outstanding borrowings of $2 million at 8% and 51 million at 9%. Required 1. Compute the amount of interest capitalized related to the con di your interim calculations. Round your final answer to the nearest dollar. decreases shareholders' equity decreases the cost of the building increases expenses 2. Next Level In the current period, the capitalization of interes increases net income are period the effect of captalaed interest is to Snowbird Company is constructing a building that qualifies for interest capitalization. It is built between January 1 and December 31,2019 , Snowbird made the folloning expenditures related to this building: The company borrowed $500,000 at 12% to help finance the project. In addition, Snowbird had outstanding borrowings of $2 milion at 8% and $1 million at 9%. Required: 1. Compute the amount of interest capitalized related to the construction of the buiding. Do not round your interim calculations. Round your final answer to the nearest dollar. 4 2 decreases depreciation expense capitalization of interest ; in future period the effect of capitalized interest is to decreases shareholdera' equity 3 . increases net income