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Calculate the amount that tcm developers

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Question - TCM Developers constructed a townhouse for $30m in their last financial year 2019. They secured a loan of $27 from CMAS Co-operative Ltd which was paid over to the contractor $12m and $15m on 1 January and 1 July 2019 respectively. The interest rate on the debt is 9% per annum. The townhouse was completed on 31 December 2019.

i. According to IAS 23, Borrowing Costs, how should the borrowing cost be treated by TCM Developers?

ii. Calculate the amount that TCM Developers can capitalise into the cost of the construction.

iii. Show the journal entry for recording the amount calculated in part (ii).

Reference no: EM132855159

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