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On 1 October 20X1 Bash Co borrowed $6m for a term of one year, exclusively to finance the construction of a new piece of production equipment. The interest rate on the loan is 6% and is payable on maturity of the loan.
The construction commenced on 1 November 20X1 but no construction took place between 1 December 20X1 to 31 January 20X2 due to employees taking industrial action. The asset was available for use on 30 September 20X2 having a construction cost of $6m.
What is the carrying amount of the production equipment in Bash Co’s statement of financial position as at 30 September 20X2?
Hi,
I’m happy to answer the question but you need to have attempted the question first so that I can then point out where you are going wrong. I don not just answer questions outright so if you can show an attempt then I’ll gladly help you out.
Thanks
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