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Entity A has the following loan finance in place during the year: $2,560,000 of 7% loan finance $3,550,000 of 9% loan finance Entity A constructed

Entity A has the following loan finance in place during the year:

$2,560,000 of 7% loan finance
$3,550,000 of 9% loan finance

Entity A constructed a new factory which cost $4,655,000 and this was funded out of the existing loan finance. The factory took 9 months to complete within the same reporting year.

REQUIRED:

Measure the borrowing costs should be capitalised

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