During 2022, Romart Company constructed a new building at a cost of P30,000,000. The expenditures for the building, which was finished late in 2022, were incurred evenly during the year. The entity had the following loans outstanding on December 31, 2022: > 10% note to finance specifically construction of the building dated January 1, 2022, P10,000,000 and unpaid on December 31, 2022. Investments were made on the proceeds from the loan and income of P100,000 was realized in 2022. > 12% 20-year bonds payable issued at face value on April 30, 2021, P30,000,000 > 8% five-year note payable, dated March 1, 2021, P10,000,000 What amount of interest is capitalized as cost of the new building? A. 1,550,000 B. 1,450,000 C. 1,400,000 D. 1,500,000

During 2022, Romart Company constructed a new building at a cost of P30,000,000. The expenditures for the building, which was finished late in 2022, were incurred evenly during the year. The entity had the following loans outstanding on December 31, 2022: > 10% note to finance specifically construction of the building dated January 1, 2022, P10,000,000 and unpaid on December 31, 2022. Investments were made on the proceeds from the loan and income of P100,000 was realized in 2022. > 12% 20-year bonds payable issued at face value on April 30, 2021, P30,000,000 > 8% five-year note payable, dated March 1, 2021, P10,000,000 What amount of interest is capitalized as cost of the new building? A. 1,550,000 B. 1,450,000 C. 1,400,000 D. 1,500,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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