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What amount should the company capitalize as borrowing cost

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Question - On January 1, 2020, Z Company began construction of a building which took 8 months to complete. The company borrowed $675,00 with an 5% interest rate for the construction of the building. The company was able to reinvest the unused borrowed funds at a return rate of 2% during the construction period. The company made the following progress payments during construction: January 1 - $225,000, May 1 - $225,000, September 1 - $225,000. The building was completed on September 1. Assuming the company uses IFRS for financial reporting, what amount should the company capitalize as borrowing cost?

Reference no: EM133109250

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