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On January 1, 2021, Ansley Company contracted with a contractor to construct a building for P20,000,000. Ansley is required to make five payments in 2021, with the last payment scheduled on the date of completion. The building was completed on December 31, 2021. The entity made the following payments during 2021 January 1-2.000.000 March 31-4,000,000 June 30-6,100,000 September 30-4400.000 December 31-3,500,000 Total-20,000,000 The entity had the following debt outstanding on December 31, 2021 1) 12% 4-year note dated January 1, 2021, with interest compounded quarterly, both principal and interest due December 31, 2024, relating specifically to the building project- 8.500.000 2) 10% 10-year note dated December 31, 2020, with simple interest payable annually on December 31-6,000,000 3) 12% 5-year note dated December 31, 2020 with simple interest and interest payable annually on December 31-7,000,000 What total amount of interest should be capitalized as cost of the bu December 31, 20212

On January 1, 2021, Ansley Company contracted with a contractor to construct a building for P20,000,000. Ansley is required to make five payments in 2021, with the last payment scheduled on the date of completion. The building was completed on December 31, 2021. The entity made the following payments during 2021 January 1-2.000.000 March 31-4,000,000 June 30-6,100,000 September 30-4400.000 December 31-3,500,000 Total-20,000,000 The entity had the following debt outstanding on December 31, 2021 1) 12% 4-year note dated January 1, 2021, with interest compounded quarterly, both principal and interest due December 31, 2024, relating specifically to the building project- 8.500.000 2) 10% 10-year note dated December 31, 2020, with simple interest payable annually on December 31-6,000,000 3) 12% 5-year note dated December 31, 2020 with simple interest and interest payable annually on December 31-7,000,000 What total amount of interest should be capitalized as cost of the bu December 31, 20212

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2021, Ansley Company contracted with a contractor to construct a building for P20,000,000. Ansley is required to make five payments in 2021, with the last payment scheduled on the date of completion. The building was completed on December 31, 2021. The entity made the following payments during 2021: January 1-2,000,000 March 31-4,000,000 June 30-6,100,000 September 30-4.400.000 December 31-3,500,000 Total-20,000,000 The entity had the following debt outstanding on December 31, 2021: 1) 12% 4-year note dated January 1, 2021, with interest compounded quarterly, both principal and interest due December 31, 2024, relating specifically to the building project- 8.500,000 2) 10% 10-year note dated December 31, 2020, with simple interest payable annually on December 31-6,000,000 3) 12% 5-year note dated December 31, 2020 with simple interest and interest payable annually on December 31-7,000,000 What total amount of interest should be capitalized as cost of the building on December 31, 20217
Transcribed Image Text:On January 1, 2021, Ansley Company contracted with a contractor to construct a building for P20,000,000. Ansley is required to make five payments in 2021, with the last payment scheduled on the date of completion. The building was completed on December 31, 2021. The entity made the following payments during 2021: January 1-2,000,000 March 31-4,000,000 June 30-6,100,000 September 30-4.400.000 December 31-3,500,000 Total-20,000,000 The entity had the following debt outstanding on December 31, 2021: 1) 12% 4-year note dated January 1, 2021, with interest compounded quarterly, both principal and interest due December 31, 2024, relating specifically to the building project- 8.500,000 2) 10% 10-year note dated December 31, 2020, with simple interest payable annually on December 31-6,000,000 3) 12% 5-year note dated December 31, 2020 with simple interest and interest payable annually on December 31-7,000,000 What total amount of interest should be capitalized as cost of the building on December 31, 20217
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