Ocho Rios Construction Limited acquired a loan for 48 million on 1 January 2019 to begin the construction of a bridge. The loan was acquired from Century Bank at a nominal interest rate of 10% and an effective rate of 12%. Construction did not begin on the bridge until, 1 May 2019 and was completed and ready for use on 31 December 2019. The company invested $20 m of the funds received from the bank over the period 1 January to 30 August 2019 at an interest rate of 8%. During the month of September 2019 construction on the project was suspended.

Required for the year ended 31 December 2019 show the following:

a.) the statement of Comprehensive Income Extract for the year

b.) The Borrowing cost to be capitalized on the Statement of Financial Position

Answer rating: 100% (QA)

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