A company commenced construction on a qualifying asset on 1 April 2022. Progress payments were made as follows:

• 1 April 2022 = R6 000 000
• 1 August 2022 = R2 000 000

The construction was financed by general borrowings. The following bank loans were outstanding for the entire 2022 year:

• R15 million 10% secured loan
• R25 million 12% unsecured loan

What is the amount of the borrowing costs that need to be capitalised on 31 December 2022 in respect of the project?

Answer:  R 

Note: Enter only the amount (do not show your calculation, and do not make use of spaces, full-stops, commas or R-signs). Example: 745000

(2 Marks)