[jannel]

A is the correct ans

IAS 23 prescribes all interest received from reinvestment of loans be netted against interest payable for that loan. However, only for the period the loan was utilized.

Workings

01.04.20×3 Issued 6% $20m loan

01. 05. 20×3 Project started

30.11.20×3 Project ended

01. 04. 20×3 to 01. 07. 20×3 $6m reinvested at 5%

0.05 x $6,000,000 x 3/12 = $75,000.00

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