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How much interest should be capitalized

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Problem 1: Wednesday Corporation built a P5,000,000 asset in 2021. The total weighted average expenditures were P3,000,000. To assist with construction, a P2,200,000 loan at 10% was obtained on Jan. 1, 2021, and funds not required for construction were temporarily invested in short-term securities generating and interest revenue of P50,000. Aside from the borrowed construction funds, the only other debt outstanding over the year was a P2,500,000, 10-year, 12% note payable dated Jan. 1, 2018. How much interest should be capitalized in 2021?

Reference no: EM132988260

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