What is the amount of capitalizable borrowing cost? (Use 3 decimal places for capitalization rate.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Isko Company had the following general borrowings during 2021 which were used to finance the
construction of the entity's new building.
Principal
2,800,000
Borrowing Cost
280,000
10% bank loan
10% short-term note
1,600,000
160,000
2,000,000
6,400,000
The construction began on January 1, 2021 and the building was completed on December 31, 2021. In
the first phase of the construction, there were idle funds which the entity invested and earned interest
12% long-term loan
240,000
680,000
income of P62,500. Expenditures on the building were made as follows:
January 1
March 31
400,000
1,000,000
June 30
1,200,000
September 30
1,000,000
December 31
400,000
What is the amount of capitalizable borrowing cost? (Use 3 decimal places for capitalization rate.)
Transcribed Image Text:Isko Company had the following general borrowings during 2021 which were used to finance the construction of the entity's new building. Principal 2,800,000 Borrowing Cost 280,000 10% bank loan 10% short-term note 1,600,000 160,000 2,000,000 6,400,000 The construction began on January 1, 2021 and the building was completed on December 31, 2021. In the first phase of the construction, there were idle funds which the entity invested and earned interest 12% long-term loan 240,000 680,000 income of P62,500. Expenditures on the building were made as follows: January 1 March 31 400,000 1,000,000 June 30 1,200,000 September 30 1,000,000 December 31 400,000 What is the amount of capitalizable borrowing cost? (Use 3 decimal places for capitalization rate.)
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