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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Borrowing cost
Orinoco borrowed $3m at 9% to finance construction of a factory on 1 May 20X7. Work on the project began on 1 June 20X7. $1m of the loan was not required to be spent until 1 September 20X7, so was reinvested until then at 7%.
What amount of borrowing costs should be capitalised for the year to 31 December 20X7?
A.$140,000
B.$156,667
C.$157,500
D.$180,000
Hi,
I can help you with the answer to the question but I’d need to see you having attempted it first so that I can then explain where you’ve gone wrong and can then help you with your understanding.
Look forward to hearing back from you.
Thanks