Question
Ferrari Plc received 8% BWP3,000,000 loan from financial institution on the 1 April 2020. The loan has an effective interest rate of 10.5% and redeemable
Ferrari Plc received 8% BWP3,000,000 loan from financial institution on the 1 April 2020. The loan has an effective interest rate of 10.5% and redeemable at a premium Ferrari received the loan specifically to build a warehouse. Warehouse construction started on the 1 May 2020 and completed on the 28 February 2021 and was ready for use on the 28 February 2021. But the Ferrari only started using it on 1 April 2021.
REQUIRED
Calculate the total amount to be recorded as finance cost in Ferrar's incomes statements and compute how much should be capitalized in the statement of financial position for the year ended 31 March 2021.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started