Show me the steps to solve A$.$

i$.$ Define the term Borrowing cost according to IAS $23.$

$(2$ marks$)$

ii$.$ Outline the conditions under which borrowing cost should be capitalised

$(6$ marks$)$

B$.$ Cooper Plc also has a commercial building that started construction on the January $1$

$2023.$The building is being financed with $$80$ million of debt, $64$ million of which is a

construction loan specifically for the construction of the building. The rest of the

construction is financed out of the general pool of debts of the company. The company

will use the building to manufacture a line of new products. The debt structure of the firm

is as follows:

The debentures and the $10-$year $10\%$ note were issued in $2016.$

Required:

i$.$ Compute the amount of interest payable during the year

$(6$ marks$)$

ii$.$ Determine the amount of interest cost to be capitalised to the plant under construction

$(9$ marks$)$

iii. What amount of interest should be reported on the statement of comprehensive

income?

$(3$ marks$)$

iv$.$ How should borrowing cost be disclosed in the financial statement?

$(4$ marks$)$