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borrowing cost

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › borrowing cost

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by P2-D2.
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  • September 8, 2024 at 10:08 am #710962
    kennigara
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    • Topics: 193
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    • ☆☆☆

    when we capitalise borrowing cost what is journal entry of credit side is credit side will be finane cost?

    DR PPE

    CR Finance cost

    September 8, 2024 at 11:04 am #710967
    kennigara
    Participant
    • Topics: 193
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    • ☆☆☆

    when we expense the p/l what what will be then the journal entry?

    September 11, 2024 at 9:31 pm #711340
    P2-D2
    Keymaster
    • Topics: 4
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    • ☆☆☆☆☆

    Hi,

    The loan on which the borrowing costs relate to will be held under amortised cost. Under amortised cost the finance cost is accounted for by DR Finance Cost CR Loan. When capitalising the borrowing costs the DR is taken to PPE as opposed to finance costs.

    Thanks

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