On July 1, 2365, Sustainable Living Solutions Inc. contracted Solar Energy Dynamics to install solar panels for $700,000. Sustainable Living Solutions Inc. made payments for the installation as follows: August 1, $200,000, November 1, $300,000, February 1, $200,000. The installation was completed, and the solar panels were operational on February 28, 2366. Sustainable Living Solutions Inc. had the following outstanding debt as of December 31, 2366:

i) 10% four-year note to finance the installation, dated July 1, 2365, with interest payable annually on December 31. Principal amount: $400,000. ii) 6% six-year note payable, dated July 1, 2362, with interest payable annually on December 31. Principal amount: $300,000.

Required: i) Determine the amount of interest to be capitalized in 2366 in relation to the solar panel installation. (6 marks) ii) Prepare journal entries for Sustainable Living Solutions Inc. during 2366.