1. Anna Co., one of Zoren Co.'s credit customers, is experiencing financial difficulties and a downward trend in its financial performance. The firm is unable to service its debts and as a result has missed the payment of its note and accrued interest with Zoren Co. The principal amount of the note is P500,000 (which is already due) with annual interest of 10% payable annually. Accrued interest balance at December 31, 2019 is P50,000. Anna Co. management has negotiated a modification of its debt terms with Zoren Co. and agreed to these new terms: A. Forgive the accrued interest at December 31, 2019 B. Extend the payment of the principal for two years C. Reduce the interest rate (payable annually) to 8%. How much impairment loss should be recognized by Zoren Co. on December 31, 2019?

2. On December 31, 2019, Gel Company sold used equipment with carrying amount of P2,000,000 in exchange for a noninterest bearing note of P5,000,000 requiring 10 annual payments of P500,000. The first payment was made on December 31, 2020. The market interest for similar note was 12%. The present value of ordinary annuity of 1 at 12% is 5.65 for 10 periods and 5.33 for 9 periods. What is the carrying amount of the notes receivable on December 31, 2019?

3. Using the same data in problem found in Question 2, how much is the gain on sale of equipment to be recognized in 2019?

4.. Using the same data in problem found in Question 2, how much is the interest income for 2020?

5. Using the same data in problem found in Question 2, how much is the carrying amount of note receivable on December 31, 2020?

6. Shelby Company Ltd. has 8% note receivable dated June 30, 2019 amounting to P1,500,000. Payments of P500,000 in principal plus accrued interest are due annually on July 1, 2020, 2021, and 2022. What is the balance of notes receivable on July 1, 2020?

7. Using the same data in problem found in Question 6, what amount should be reported as a current asset for interest on the note receivable in the June 30, 2021 statement of financial position?