I don't have screenshots but...it takes 1 Time Capsule per character frozen.
I'm trying to remember how it went since I did this months ago.
When you're at your character selection and have selected a character, you press the Freeze button at the bottom. A box will appear telling you what happens (can't access character and items, friend list will be deleted, etc).
If you already have everything set, then you can freeze the character.
If you make a new character and all 3 slots are full, you're going to have to buy another Time Capsule to freeze a character.
When I unfroze my characters, it didn't take any time capsules.