Zhang Ltd. (see BE10.2) had outstanding all year a 10%, 5-year HK$4,000,000 note payable and an 11%,

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Zhang Ltd. (see BE10.2) had outstanding all year a 10%, 5-year HK$4,000,000 note payable and an 11%, 4-year HK$3,500,000 note payable. Compute the capitalization rate used for borrowing cost capitalization purposes.


BE10.2

Zhang Ltd. is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were HK$1,800,000 on March 1, HK$1,200,000 on June 1, and HK$3,000,000 on December 31. Compute Zhang’s average carrying amount for borrowing cost capitalization purposes.

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Intermediate Accounting IFRS

ISBN: 9781119607519

4th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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