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What is the capitalizable borrowing cost of the building

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Problem 1: On January 1, 2014, GE Inc. borrowed a one-year P10,000,000 loan from BDO Inc. to finance specifically the construction of its new administrative building. The loan has an interest rate of 15%. Construction of the building started on January 1, 2014 and it was completed at the end of year 2014. Out of the total loan, P4,000,000 was temporarily invested by GE Inc. to the BDO for a 90-day time deposit with 10% interest. Assuming a 360-day period, what is the capitalizable borrowing cost of the building?

Reference no: EM132834029

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