Situation I On January 1, 2017, Nash, Inc. signed a fixed-price contract to have Homeward Construction construct a major plant facility at a cost of $7,900,000. It was estimated that it would take 2 years to complete the project. Also on January 1, 2017, to finance the construction cost, Nash borrowed $7,900,000 payable in 10 annual installments of $790,000, plus interest at the rate of 8%. During 2017, Nash made deposit and progress payments totaling $2,962,500 under the contract; the weighted-average amount of accumulated expenditures was $1,185,000 for the year. The excess borrowed funds were invested in short-term securities, from which Nash realized investment income of $174,000. What amount should Nash report as capitalized interest at December 31, 2017? Capitalized interest $