Clay Company started construction of a new office building on January 1, Year 8, and moved into the finished building on July 1, Year 9.
Of the building's $2.5 million total cost, $2 million was incurred in Year 8 evenly throughout the year. Clay's incremental borrowing rate was 12% throughout Year 8, and the total amount of interest incurred by Clay during Year 8 was $102,000. What amount should Clay report as capitalized interest at December 31, Year 8?