QUESTION 1 Kindly help me answer this question. this is all i have , do not ask for more details During 2019 it was decided to undertake a substantial expansion programme. This expansion programme commenced in 2020 and details thereof are as follows:

Description	Amount	Financing
Land	N$ 500 000	80% mortgage loan at 18% p.a. by Panbank
Building	N$ 1 500 000	80% mortgage loan at 18% p.a. by Panbank80% mortgage loan at 18% p.a. by Panbank
Plant	N$ 2 000 000	100 % loan at 20% p.a. repayable over 5 years commencing 1 January 2022
Factory Equipment	N$ 500 000	Finance lease with annual instalments of N$200 000 each, payable in arrears over 4 years.

The bank capitalises interest on the above loans at the end of the company's financial year. The assets were acquired as follows: Land: Payment on transfer on 1 February 2020. Buildings: Commencement of construction activities on 1 February 2020. Progress payments: 30 April 2020 500 000 31 July 2020 250 000 31 October 2020 250 000 31 January 2021 250 000 30 April 2021 250 000 completion of building - 1 May 2021. Cash on hand is used to make 20% of each payment in respect of land and buildings. Plant: The plant will be brought into use on 1 May 2021 but payment to the foreign supplier will be made on shipment of the plant on 31 January 2021. Funds from the N$2 000 000 loan are available from this date in order to finance the purchase. Factory equipment: The supplier of the equipment undertook to deliver the equipment on 1 April 2021. The finance lease agreement will be concluded on the same date. This equipment will also be brought into use on 1 May 2021. Page 17 of 20 Required: Marks 1.1 Briefly explain which portion of the borrowing costs from the different sources of financing must be capitalised in terms of the requirements of IAS 23: Borrowing costs 8 1.2 Calculate the borrowing costs which may be capitalised for the financial years ended 31 December 2020 and 31 December 2021 in accordance with the requirements of International Financial Reporting Standards. Assume that Panbank Ltd compounds interest annually, on 31 December.