Maragondon Company had the following borrowings during 2018. The borrowings were made for general purposes but the proceeds were used in part to finance the construction of a new building: Principal Interest 12% bank loan 10,000,000 1,200,000 15% long-term loan 20,000,000 3,000,000 30,000,000 4,200,000 The construction began on January 1, 2018 and was completed on December 31, 2018. Expenditures on the building were made as follows: January 1 8,000,000 June 30 8,000,000 December 31 4,000,000 The capitalizable borrowing cost is a. 1,680,000 b. 1,400,000 c. 4,200,000 d. 1,620,000 What is the solution for the option A?
Maragondon Company had the following borrowings during 2018. The borrowings were made for general purposes but the proceeds were used in part to finance the construction of a new building: Principal Interest 12% bank loan 10,000,000 1,200,000 15% long-term loan 20,000,000 3,000,000 30,000,000 4,200,000 The construction began on January 1, 2018 and was completed on December 31, 2018. Expenditures on the building were made as follows: January 1 8,000,000 June 30 8,000,000 December 31 4,000,000 The capitalizable borrowing cost is a. 1,680,000 b. 1,400,000 c. 4,200,000 d. 1,620,000 What is the solution for the option A?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Maragondon Company had the following borrowings during 2018. The borrowings were made for general purposes but the proceeds were used in part to finance the construction of a new building:
| Principal | Interest | |
| 12% bank loan | 10,000,000 | 1,200,000 |
| 15% long-term loan | 20,000,000 | 3,000,000 |
| 30,000,000 | 4,200,000 |
The construction began on January 1, 2018 and was completed on December 31, 2018. Expenditures on the building were made as follows:
January 1 8,000,000
June 30 8,000,000
December 31 4,000,000
The capitalizable borrowing cost is
a. 1,680,000
b. 1,400,000
c. 4,200,000
d. 1,620,000
What is the solution for the option A?
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