Esinam Ltd

Esinam company had the following loans in place at the beginning and end of 2019

1 January 31 December

2019 2019

GHS GHS

25% Bank loan repayable 2020 480,000 480,000

30% Bank loan repayable 2021 320,000 320,000

20% Debenture Stock repayable 2022 - 300,000

On 1 January 2019, the company began the construction of a qualifying asset (a bridge) to link the factory location to the settlement site of the workers at a cost of GHS400,000 , using existing borrowings (the 25% bank loan and the 30% bank loan). Expenditure drawn down for the construction was GHS120,000 on 1 January 2019; GHS80,000 on 1 May 2019 and GHS200,000 on 1 October 2019. The bridge was completed and put to use on 31 December 2019.

The 20% debenture stock was specifically issued to fund the construction of another qualifying asset (an office building), construction of which began on 1 July 2019.

Required:

Calculate the borrowing costs to be capitalized for the bridge.