Problem 25-14 (AICPA Adapted) Sun Company was constructing an asset that qualified for interest capitalization. The construction began at the beginning of the current year and was completed at the end of current year. The construction cost totaled P12,000,000 and was incurred evenly during the current year. The entity had outstanding notes payable during the entire year of construction comprising P6,000,000 8% interest and P9,000,000 9% interest. None of the borrowings were specified for the construction of the qualified asset. 1. What amount of interest should be capitalized as cost of the asset? a. 480,000 b. 516,000 c. 810,000 d. 960,000 2. What amount should be reported as interest expense for the current year? a. 960,000 b. 645,000 c. 774,000 d. 0