Bond Company constructs its own buildings. In 2019, a total of P1,228,500 interest was included as

part of the cost of a new building just being completed.

The following is a summary of construction expenditures in 2020:

Accumulated in 2019, including capitalized interest P18,228,500

March 1 7,000,000

September 1 4,000,000

December 31 5,000,000

Bond has the following outstanding loans at December 31, 2020:

12% note related directly to new building;

Term, 5 years from beginning of construction P10,000,000

General borrowings:

10% note issued prior to construction of new building;

term, 10 years 5,000,000

8% note issued prior to construction of new bulding;

Term, 5 years 10,000,000

24. How much is the total capitalizable borrowing cost under PAS 23?

a. 2,534,761 c. 1,334,761

b. 2,500,000 d. 1,200,000

25. How much interest expense should be reported in the 2020 income statement?

a. 0 c. 34,761

b. 1,300,000 d. 1,334,761

26. What is the total cost of the new building as of December 31, 2020?

a. 36,763,261 c. 36,728,500

b. 35,500,000 d. 27,895,167