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CASE 1:Shawn Corporation.borrowed P1,000,000 from BPI Inc. s

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CASE 1:Shawn Corporation.borrowed P1,000,000 from BPI Inc. specifically to finance the construction of its building. The proceeds from the borrowing were received on January 2, 2020 and were supported by a 5 year, 12% note payable. The construction commenced on July 1, 2020 and was substantially completed by November 30, 2020. The unused proceeds from the loan were reinvested on a monthly basis all throughout the year to earn 5% annual interest. The following were used from the proceeds of the loan (assume at the beginning of each months)July P100,000August 150,000September 300,000October 200,000November 150,000Requirements:20. How much is the capitalizable borrowing cost?a. 50,000 c. 39,792b. 49,792 d. 109,79221. What is the total interest expense to be recognized for 2020?a. 120,000 c. 70,000b. 60,000 d. 50,000CASE 2:Aaron Corp. contracted Glassman Inc. on January 1, 2020 to construct building for P80,000,000 on land Aaron Corp. purchased a couple of years back. The contract provides that Aaron Corp. is to make five payments in 2020, with the last payment to be made upon completion. The building was completed on November 30, 2020.Aaron Corp. made the following payments during 2020:January 1 P8,000,000April 1 19,000,000July 31 24,400,000October 1 21,600,000November 30 7,000,000Aaron Corp. made the following arrangements with financing companies in 2020:?12%, P25M loan dated January 1, 2020, with interest compounded semi-annually. Both principal and compounded accumulated interests are payable on December 31, 2021. This loan related specifically to the building project.?10%, 10-year, P35M note dated December 31, 2019, with simple interest; interest payable annually on December 31. The loan was for general financing purposes including the partial financing of the construction.?12%, 5-year. P40M note dated December 31, 2019, with simple interest; interest payable annually on December 31. The loan was for general financing purposes including the partial financing of the construction.Requirements:22. The amount of interest to be capitalized in 2020?23. The amount of interest to be expense in 2020?AccountingBusinessManagerial AccountingJMN 494

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