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What is the average capitalization rate on general borrowing

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Hebi Corp. started constructing its new building at an estimated cost of P50,000,000 on January 1, 2021. The construction is expected to be completed by December 31, 2023. Hebi has the following borrowings outstanding during 2021:

11%, P10,000,000, interest payable annually, due on January 1, 2025 (general)

12%, P20,000,000, interest payable semiannually, issued December 31, 2020 (specific)

10%, P14,000,000, interest payable monthly, due on May 31, 2022 (general)

Hebi determined that weighted average expenditures for the construction in 2021 was P36,000,000.

Problem 1) What is the average capitalization rate on general borrowings?

Problem 2) How much is the interest expense for 2021?

Reference no: EM132939637

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