Find what amount should clay report as capitalized interest

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Question 1: Clay Company started construction of a new office building on January 1, 20X3 and moved into finished building on July 1, 20X4. Of the building's P2, 500,000 total cost P2, 000,000 was incurred in 20X3 evenly throughout the year. Clay's incremental borrowing rate was 12% throughout 20X3, and the total amount of interest incurred by Clay during 20X3 was P102, 000. What amount should Clay report as capitalized interest at December 31, 20X3?

Option 1: P102, 000

Option 2: P120, 000

Option 3: P150, 000

Option 4: P240, 000

Reference no: EM132586687

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