During 2020, FAITH Inc constructed assets costing P30,000,000. The weighted-average accumulated expenditures on these assets during 2020 was P18,000,000. To help pay for construction, P13,200,000 was borrowed at 8% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding P250,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013. What is the amount of the interest capitalized for 2020?
During 2020, FAITH Inc constructed assets costing P30,000,000. The weighted-average accumulated expenditures on these assets during 2020 was P18,000,000. To help pay for construction, P13,200,000 was borrowed at 8% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding P250,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013. What is the amount of the interest capitalized for 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![During 2020, FAITH Inc constructed assets costing P30,000,000. The
weighted-average accumulated expenditures on these assets during 2020 was
P18,000,0000. To help pay for construction, P13,200,000 was borrowed at 8%
on January 1, 2020, and funds not needed for construction were temporarily
invested in short-term securities, yielding P250,000 in interest revenue. Other
than the construction funds borrowed, the only other debt outstanding during
the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013.
What is the amount of the interest capitalized for 2020?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb189f980-ed69-4ac0-9267-f189f000985d%2F1534e86b-81e7-4a26-9d97-9f0ae86ef2ff%2F0wt9cdp_processed.jpeg&w=3840&q=75)
Transcribed Image Text:During 2020, FAITH Inc constructed assets costing P30,000,000. The
weighted-average accumulated expenditures on these assets during 2020 was
P18,000,0000. To help pay for construction, P13,200,000 was borrowed at 8%
on January 1, 2020, and funds not needed for construction were temporarily
invested in short-term securities, yielding P250,000 in interest revenue. Other
than the construction funds borrowed, the only other debt outstanding during
the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013.
What is the amount of the interest capitalized for 2020?
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