Entity A has the following loan finance in place during the year: $2,560,000 of 7.50% loan finance $3,550,000 of 9.50% loan finance Entity A constructed a new factory which cost $5,655,000 and this was funded out of the existing loan finance. The factory took 9 months to complete within the same reporting year. REQUIRED: Measure the borrowing costs should be capitalised. The borrowing costs should be capitalised is _________?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Entity A has the following loan finance in place during the year:

  • $2,560,000 of 7.50% loan finance
  • $3,550,000 of 9.50% loan finance

Entity A constructed a new factory which cost $5,655,000 and this was funded out of the existing loan finance.

The factory took 9 months to complete within the same reporting year.

REQUIRED:

Measure the borrowing costs should be capitalised.

The borrowing costs should be capitalised is _________?

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