During 2020, FAITH Inc constructed assets costing P30,000,000. The weighted-average accumulated expenditures on these assets during 2020 was P18,000,000. To help pay for construction, P13,200,000 was borrowed at 8% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding P250,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013. What is the amount of the interest capitalized for 2020?
During 2020, FAITH Inc constructed assets costing P30,000,000. The weighted-average accumulated expenditures on these assets during 2020 was P18,000,000. To help pay for construction, P13,200,000 was borrowed at 8% on January 1, 2020, and funds not needed for construction were temporarily invested in short-term securities, yielding P250,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013. What is the amount of the interest capitalized for 2020?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 18E
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Transcribed Image Text:During 2020, FAITH Inc constructed assets costing P30,000,000. The
weighted-average accumulated expenditures on these assets during 2020 was
P18,000,0000. To help pay for construction, P13,200,000 was borrowed at 8%
on January 1, 2020, and funds not needed for construction were temporarily
invested in short-term securities, yielding P250,000 in interest revenue. Other
than the construction funds borrowed, the only other debt outstanding during
the year was a P15,000,000, 10-year, 8% note payable dated January 1, 2013.
What is the amount of the interest capitalized for 2020?
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