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MC Question 15

On 1 October 20X1, Bash Co borrowed $6m for a term of one year, exclusively to finance the construction of a new
piece of production equipment.

The interest rate on the loan is 6% and is payable on maturity of the loan.

The construction commenced on 1 November 20X1 but no construction took place between 1 December 20X1 to
31 January 20X2 due to employees taking industrial action.

The asset was available for use on 30 September 20X2 having a construction cost of $6m.

What is the carrying amount of the production equipment in Bash Co’s statement of financial position as at
30 September 20X2?

A     $5,016,000
B     $6,270,000
C     $6,330,000
D     $6,360,000