In January 1, 2019 Superior Limited, a newly formed company employed you as the Accountant for a project to be constructed. As the new Accountant, it is imperative that you are conversant with IAS 23 Accounting for Borrowing Costs as this will be a major project built from a loan secured from an international bank. On April 1, 2019, the company began construction of homes for professional who desired housing in gated communities. The construction is expected to take four (4) years. It is being financed by the issuance of a bond for $40 million at 12% per annum.

The bond was issued at the beginning of the construction. The bond carry a 1.5% issuance cost. The project is also financed by the issuance of share capital with a 14% cost of capital. The company has opted to adhere to the principles of IAS 23 to capitalized borrowing costs. During the construction period, the companys Accountant invested part of the proceeds from the loan resulting in interest of $3.5m.

Required: Prepare the extract for the statement of financial position at the end of the construction period.