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9th Question
Accountancy
Why is only one month's interest income taken to reduce it from the borrowing cost? Video Details ------------- P1 - Accounting Standards - CA Inter AS 16 #20. MCQ Test 3 - AS 16
Answers (4)
Please find the Question below 9. (Hard) A company borrowed Rs. 1,00,000 on 1st April 2017 for the purpose of acquisition of a qualifying asset. The loan attracts an interest rate of 12% per annum. The company incurred 1% of the loan amount as processing charges. The qualifying asset took six months to get ready for its intended use. The company initially had surplus fund to the extent of Rs. 50,000 which was deposited in a FD account bearing interest of 6% per annum. The loan was repaid on 31st December 2017. What is the amount of borrowing cost to be capitalised?
CA Suraj Lakhotia Admin
One sentence missed from question. Will update it.
A company borrowed Rs. 1,00,000 on 1st April 2017 for the purpose of acquisition of a qualifying asset. The loan attracts an interest rate of 12% per annum. The company incurred 1% of the loan amount as processing charges. The qualifying asset was ready by 30th September 2017 . The company initially had surplus fund to the extent of Rs. 50,000 which was deposited in a FD account bearing interest of 6% per annum for 1 month. The loan was repaid on 31st December 2017. What is the amount of borrowing cost to be capitalised?
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