Response to the following questions:
1. Explain how a company determines the amount of interest to capitalize when it constructs an asset.
2. A company borrows some money, which it uses to acquire a parcel of land for a real estate development project. Before construction begins, a period of time passes while the company obtains the necessary planning permission. May the company capitalize interest during this period? If so, should it capitalize the interest to the land or the building account?
Support your answer using a minimum of two professional or academic sources.