On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of ₱180,000. The construction was completed on December 31, 20x1 for total construction costs of ₱7,000,000. How much is the cost of the building on initial recognition? * A. 7,320,000 B. 7,500,000 C. 6,680,000 D. 7,000,000
On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of ₱180,000. The construction was completed on December 31, 20x1 for total construction costs of ₱7,000,000. How much is the cost of the building on initial recognition? * A. 7,320,000 B. 7,500,000 C. 6,680,000 D. 7,000,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 20x1, Entity A obtained a 10%, ₱5,000,000 loan, specifically to finance the construction of a building. The proceeds of the loan were temporarily invested and earned interest income of ₱180,000. The construction was completed on December 31, 20x1 for total construction costs of ₱7,000,000. How much is the cost of the building on initial recognition? *
A. 7,320,000
B. 7,500,000
C. 6,680,000
D. 7,000,000
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