See Page1' Illustration PROBLEM On January 1, 2019, Cagayan Company took out a loan of P24,000,000 in order to finance specifically the renovation of a building. The renovation work started on the...

Extracted text: See Page1' Illustration PROBLEM On January 1, 2019, Cagayan Company took out a loan of P24,000,000 in order to finance specifically the renovation of a building. The renovation work started on the same date. The loan carried annual interest at 10%. Work on the building was substantially complete on October 31, 2019. The loan was repaid on December 31, 2019 and P200,000 investment income was earned in the period to October 31 on the proceeds of the loan not yet used for the renovation. What is the amount of borrowing cost to be included in the cost of the building? a. 2,400,000 b. 2,200,000 C. 2,000,000 d. 1,800,000 34