1. 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?

2. Using the same data in problem found in Question 1, how much is the gain on sale of equipment to be recognized in 2019?

3. Using the same data in problem found in Question 1, how much is the interest income for 2020?

4. Using the same data in problem found in Question 1, how much is the carrying amount of note receivable on December 31, 2020?