Reference no: EM132591019

Question - Fortsman Inc. began operations on January 1, 20X4. It prepares financial statements in accordance with IFRS. The following is a summary of selected financial information for the year ended December 31, 20X4:

Equipment was purchased and brought into use on March 1, 20X4, at a cost of $300,000. Fortsman paid $80,000 cash and signed a 3% note for the balance payable in full on March 1, 20X6.

Fortsman received a $250,000 shareholder loan that was advanced on May 1, 20X4. Interest is payable annually at 5%.

Fortsman received $150,000 in proceeds from a bank loan that was advanced on June 1, 20X4. Interest is payable monthly on the first of the month at 4% per annum, starting July 1, 20X4.

Fortsman made interest payments of $8,000 during the 20X4 year. What amount should Fortsman have reported as interest expense for the year ended December 31, 20X4?