Clay Company started construction on a new office building on January 1, 2017, and it moved into the finished building on July 1, 2018. Of the building's $2,500,000 total cost, $2,000,000 was incurred in 2017 evenly throughout the year. Clay's incremental borrowing rate was 12% throughout 2017, and the total amount of interest incurred by Clay during 2017 was $102,000.
Required:
What amount should Clay report as capitalized interest at December 31, 2017?