Question $3($Borrowing costs$)($ CW $10\%)$

Holders Plc$.$ is constructing a warehouse to be used in the business. The construction is being

financed with $$6$ million of debt, $$2$ million of which is a construction loan directly on the building.

The rest is financed out of the general debt of the firm. The debt structure of the firm is as follows:

Construction Loan @ $10\%$ $$2000000$

Long term debenture @ $6\%$ $$8000000$

$$

Required: Calculate:

the amount of interest payable during the year.

the amount of capitalized interest to be included in the asset on the Statement of Financial position

the amount of interest expense to be reported on the statement of Comprehensive Income.