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CHAPTER 17: BORROWING COSTS

17-6 (AICPA Adapted)


Ans: B. 1,450,000
Solution:

Interest on specific borrowing (10,000,000 x 10%) 1,000,000

Interest income related to specific borrowing (100,000)

Interest on general borrowing (5,000,000 x 11%) 550,000

Total capitalizable interest 1,450,000

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