Maragondon Company had the following borrowings during 2005. The borrowings were made for

general purposes but the proceeds were used in part to finance the construction of a new building:

Principal Interest

12% bank loan 10,000,000 1,200,000

15% long-term loan 20,000,000 3,000,000

The construction began on January 1, 2005 and was completed on December 31, 2005. Expenditures

on the building were made as follows:

January 2 8,000,000

July 1 8,000,000

December 31 4,000,000

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Following the alternative treatment, the capitalizable borrowing cost should be

a. P1,620,000

b. P1,680,000

c. P1,400,000

d. P4,200,000