Thornton Industries began construction of a warehouse on July 1, 2016. The project was completed on March 31, 2017. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period:

- $2,000,000, 8% note

- $8,000,000, 4% note

Construction expenditures incurred were as follows:

- July 1, 2016 $400,000

- Sep 30, 2016 600,000

- Nov 30, 2016 600,000

- Jan 30, 2017 540,000

The company's fiscal year-end is December 31.

Required: Calculate the amount of interest capitalized for 2016 and 2017.

Depreciation on the company's equipment for 2017 is computed to be $18,000.the prepaid insurance account had a $6,000 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. an analysis of the company's insurance policies showed that $1,100 of unexpired insurance coverage remains.the office supplies account had a $700 debit balance on december 31, 2016; and $3,480 of office supplies were purchased during the year. the december 31, 2017, physical count showed $300 of supplies available.two-thirds of the work related to $15,000 of cash received in advance was performed this period.the prepaid insurance account had a $6,800 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. an analysis of insurance policies showed that $5,800 of coverage had expired.wage expenses of $3,200 have been incurred but are not paid as of december 31, 2017.