Marauder Company borrowed P15,000,000 at 12% to finance in part the construction of a new building on January 1, 2020 and in part for general purposes. The loan is to be repaid commencing the month following completion of the building. Expenditures for the completed structure totaled P10,000;000 during the year ended December 31, 2020. These expenditures were incurred evenly throughout the year. The entity earned interest of P200,000 for the year on the unexpended portion of the loan. 1. What amount of interest is capitalized on December 31, 2020? 1,200,000 b. 1,000,000 а. с. 600,000 d. 400,000 2. What is the interest expense for 2020? a. 1,800,000 b. 1,200,000 c. 1,600,000 d. 1,000,000

Marauder Company borrowed P15,000,000 at 12% to finance in part the construction of a new building on January 1, 2020 and in part for general purposes. The loan is to be repaid commencing the month following completion of the building. Expenditures for the completed structure totaled P10,000;000 during the year ended December 31, 2020. These expenditures were incurred evenly throughout the year. The entity earned interest of P200,000 for the year on the unexpended portion of the loan. 1. What amount of interest is capitalized on December 31, 2020? 1,200,000 b. 1,000,000 а. с. 600,000 d. 400,000 2. What is the interest expense for 2020? a. 1,800,000 b. 1,200,000 c. 1,600,000 d. 1,000,000

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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