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CHAPTER 17: BORROWING COSTS

17-5 (IAA)
Ans: C. 247,000
Solution:
Specific borrowing (2,2000,000 x 10%) 220,000
Interest revenue (45,000)
General borrowing (800,000 x 9%) 72,000
Average Expenditures 3,000,000

Specific borrowing (2,200,000)

General borrowing 800,000

Capitalized interest 247,000

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