On January 1, 2017, Spring Inc. began construction of a new warehouse for its own use. The warehouse was completed in 2018. Expenditures on the project in 2017 were as follows:

January 1, 2017 $400,000

March 31, 2017 $800,000

September 1, 2017 $360,000

Spring borrowed $500,000 on a construction loan at 6% interest rate on January 1, 2017. The loan was outstanding throughout the construction period. During 2017, the company had $300,000 in 5% bonds and $700,000 in 7% notes outstanding. Springs capitalized interest in 2017 using the specific interest method was:

a. $88,880 b. $78,960 c. $69,680 d. $67,200