On July 1, 2020, Tech Innovations Ltd. entered into a contract with Construction Masters to build a new headquarters for $2,500,000. Tech Innovations made payments for the construction as follows: August 1, $600,000, October 1, $800,000, December 1, $1,100,000. The construction was completed, and the headquarters were ready for occupancy on December 31, 2021. Tech Innovations had the following outstanding debt as of December 31, 2021:

i) 12% three-year note to finance the construction, dated July 1, 2020, with interest payable annually on December 31. Principal amount: $1,500,000. ii) 7% five-year note payable, dated July 1, 2018, with interest payable annually on December 31. Principal amount: $1,000,000.

Required: i) Determine the amount of interest to be capitalized in 2021 in relation to the construction of the headquarters. (6 marks) ii) Prepare journal entries for Tech Innovations Ltd. during 2021.