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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