during 2017 totaled P7,800,000. The entity borrowed P4,000,000 at 7% on January 1, 2017. Funds not needed for construction were temporarily invested in short-term securities, and earned P120,000 interest revenue. In addition to the construction loan, the entity had two other notes outstanding during the year, P3,000,000, 10-year, 10% note payable dated October 1, 2015, and a 5-year P2,000,000, 8% note payable dated November 2, 2015. What amount of interest should be capitalized on December 31, 2017? A. 574,000 B. 620,000 C. 509,600 D. 629,600
During 2017, Egyptian Mau Company construct building costing P18,500,000. The weighted average
accumulated expenditures on the building during 2017 totaled P7,800,000. The entity borrowed P4,000,000
at 7% on January 1, 2017. Funds not needed for construction were temporarily invested in short-term
securities, and earned P120,000 interest revenue. In addition to the construction loan, the entity had two
other notes outstanding during the year, P3,000,000, 10-year, 10% note payable dated October 1, 2015,
and a 5-year P2,000,000, 8% note payable dated November 2, 2015. What amount of interest should be
capitalized on December 31, 2017?
A. 574,000 B. 620,000 C. 509,600 D. 629,600
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