21. On January 1, 2010, Richmond, Inc. signed a fixed-price contract to have Builder Associates construct a major plant facility at a cost of $4,000,000. It was estimated that it would take three years to complete the project. Also on January 1, 2010, to finance the construction cost, Richmond borrowed

$4,000,000 payable in 10 annual installments of $400,000 plus interest at the rate of 11%. During 2010 Richmond made deposit and progress payments totaling $1,500,000 under the contract; the average amount of accumulated expenditures was $650,000 for the year. The excess borrowed funds were invested in short-term securities, from which Richmond realized investment income of $250,000. What amount should Richmond report as capitalized interest at December 31, 2010?

a. $ 71,500

b. $165,000

c. $190,000

d. $440,000