1.On April 1, 2018,J and T Courier Express issued a P9,000,000 non-interest bearing note due March 31, 2021 for a piece of land with a cash price of P6,949,800.

Requirement:

a.Determine the effective interest rate of this note

b.Show a table of discount amortization over the term of the note.

c.Determine the interest expenseand the carrying amount of the note at year ended December 31, 2018.

Prepare the necessary entries for years 2018 through 2021 relative to the foregoing, including any adjustments at year end, December 31.