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What is the capitalized borrowing cost for year ended dec

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Reference no: EM132905608

During 2023, Yammy Bee constructed various assets at a total cost of P8,400,000. The weighted average expenditures on assets qualifying for capitalization of interest during 2023 amounted to P5,600,000.

The entity had the following debt outstanding at December 31, 2023:

  • 10%, 5 year note to finance construction of various assets, dated January 1, 2023, with interest payable annually on December 31 3,600,000 
  • 12%, 10-year bonds issued at par on December 31, 2017, with interest payable annually on December 31 4,000,000
  • 9%, 3-year note payable, dated January 1, 2022, with interest payable annually on January 1 2,000,000 

Problem 1: What is the capitalized borrowing cost for the year ended December 31, 2023?

A. 800,000

B. 580,000

C. 440,000

D. 360,000

Problem 2: What is the interest expense for the year ended December 31, 2023?

A. 480,000

B. 660,000

C. 580,000

D. 440,000

Reference no: EM132905608

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