On January 1, 2022 Minito Corporation construction of homes for those families that were hit by the tsunami disaster and were homeless. The contraction expected to take 3.5 years. It is being financed by issuance of bonds for P7,000,000 at 12% per annum. The bonds were issued at the beginning of the construction. The bonds carry a 1.5% issuance cost. The project is also financed by issuance of P3 million share capital with a 14% cost of capital. The borrowing costs to be capitalized in 2022 is (use straight line amortization method) A . 870,000 B. 840,000 C. 1,290,000 D. 1,260,000
On January 1, 2022 Minito Corporation construction of homes for those families that were hit by the tsunami disaster and were homeless. The contraction expected to take 3.5 years. It is being financed by issuance of bonds for P7,000,000 at 12% per annum. The bonds were issued at the beginning of the construction. The bonds carry a 1.5% issuance cost. The project is also financed by issuance of P3 million share capital with a 14% cost of capital. The borrowing costs to be capitalized in 2022 is (use straight line amortization method) A . 870,000 B. 840,000 C. 1,290,000 D. 1,260,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2022 Minito Corporation construction of homes for those families that were hit by the
tsunami disaster and were homeless. The contraction expected to take 3.5 years. It is being financed by
issuance of bonds for P7,000,000 at 12% per annum. The bonds were issued at the beginning of the
construction. The bonds carry a 1.5% issuance cost. The project is also financed by issuance of P3 million
share capital with a 14% cost of capital. The borrowing costs to be capitalized in 2022 is (use
amortization method
A
.
870,000 B. 840,000 C. 1,290,000 D. 1,260,000
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