On December 1, 2018, ABC Manufacturing Ltd. contracted Power Solutions Inc. to install new machinery for $600,000. ABC Manufacturing Ltd. made payments for the installation as follows: January 1, $200,000, March 1, $200,000, June 1, $200,000. The installation was completed, and the machinery was operational on June 30, 2019. ABC Manufacturing Ltd. had the following outstanding debt as of December 31, 2019:

i) 10% three-year note to finance the installation, dated December 1, 2018, with interest payable annually on December 31. Principal amount: $400,000. ii) 7% five-year note payable, dated December 1, 2017, with interest payable annually on December 31. Principal amount: $200,000.

Required: i) Determine the amount of interest to be capitalized in 2019 in relation to the machinery installation. (6 marks) ii) Prepare journal entries for ABC Manufacturing Ltd. during 2019.