Clay Company started construction on a new office building on January 1, 2007, and it moved into the finished building on July 1, 2008. Of the building's \($2,500,000\) total cost, \($2,000,000\) was incurred in 2007 evenly throughout the year. Clay’s incremental borrowing rate was 12%
throughout 2007, and the total amount of interest incurred by Clay during 2007 was $102,000.

Required:
What amount should Clay report as capitalized interest at December 31, 2007?