Wakanda Company borrowed P4,000,000 on a 10% note payable to finance a new warehouse which the entity is constructing for own use. The only other debt of the entity is a P6,000,000, 12% mortgage payable on an office building. At the end of the current year, average accumulated expenditures on the new warehouse totaled P4,750,000. What amount of interest should be capitalized? A. P400,000 B. P475,000 C. P490,000 D. P522,500
Wakanda Company borrowed P4,000,000 on a 10% note payable to finance a new warehouse which the entity is constructing for own use. The only other debt of the entity is a P6,000,000, 12% mortgage payable on an office building. At the end of the current year, average accumulated expenditures on the new warehouse totaled P4,750,000. What amount of interest should be capitalized? A. P400,000 B. P475,000 C. P490,000 D. P522,500
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 2EA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...
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Wakanda Company borrowed P4,000,000 on a 10% note payable to finance a new warehouse which the entity is constructing for own use.
The only other debt of the entity is a P6,000,000, 12% mortgage payable on an office building.
At the end of the current year, average accumulated expenditures on the new warehouse totaled P4,750,000.
The only other debt of the entity is a P6,000,000, 12% mortgage payable on an office building.
At the end of the current year, average accumulated expenditures on the new warehouse totaled P4,750,000.
What amount of interest should be capitalized?
A. P400,000
B. P475,000
C. P490,000
D. P522,500
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