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How much borrowing costs are capitalized to the cost

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Problem 1: On January 1, 20x1, Entity A obtained a 12% P6,000,000 loan, specifically to finance the construction of a building. The process of the loan was temporarily invested and earned interest income of P180,000. The construction was completed on December 31, 20x1. How much borrowing costs are capitalized to the cost of the constructed building?

A. P480,000

B. P0

C. Answer not given

D. P720,000

E. P540,000

Reference no: EM132612605

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