On January 1, 2014, Grinch Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2015.Expenditures on the project were as follows:

January 1, 2014

$200,000

September 1, 2014

$300,000

December 31, 2014

$300,000

March 31, 2015

$300,000

September 30, 2015

$200,000

Grinch borrowed $750,000 at 12% interest on January 1, 2014 to be used specifically for the construction of the asset. This loan was outstanding throughout the construction period. The company also had $4,500,000 in 9% bonds outstanding in 2014 and 2015. The company uses the specific interest method to capitalize interest, and their year ends on December 31^st.

Interest capitalized by Grinch Inc. for 2014 was:

A)$48,000

B)$42,000

C)$60,000

D)$36,000

(How do you solve this?)