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What is the amount of the interest capitalized

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On January 2, 2020, BTS Inc began construction of a new processing plant. The automated plant will be finished and ready for use on September 30, 2021. Expenditures for the construction were as follows:

January 2, 2020 - P2,000,000

September 1, 2020 - 6,000,000

December 31, 2020 - 6,000,000

March 31, 2021 - 6,000,000

September 30, 2021 - 4,000,000

BTS Inc borrowed P11,000,000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had P40,000,000 in 9% bonds outstanding in 2020 and 2021.

Problem 1: What is the amount of the interest capitalized for 2020?

Reference no: EM132999071

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