On August 1, 2022, Blue Sky Corporation contracted Solar Energy Ltd. to install solar panels for $800,000. Blue Sky Corporation made payments for the installation as follows: September 1, $200,000, November 1, $300,000, February 1, $300,000. The installation was completed, and the solar panels were operational on February 28, 2023. Blue Sky Corporation had the following outstanding debt as of December 31, 2023:

i) 10% five-year note to finance the installation, dated August 1, 2022, with interest payable annually on December 31. Principal amount: $500,000. ii) 6% eight-year note payable, dated August 1, 2019, with interest payable annually on December 31. Principal amount: $300,000.

Required: i) Determine the amount of interest to be capitalized in 2023 in relation to the solar panel installation. (6 marks) ii) Prepare journal entries for Blue Sky Corporation during 2023.