A warehouse was bought by Great Co on November 30, 2019 costing P3,400,000 for storage of product Y. It has an estimated useful life of 15 years and salvage value of P400,000. The company also bought an insurance for the warehouse with coverage up to P2,500,000. On December 1, 2019, a fire broke out in the warehouse and consumed it. On the same date, the company booked a claims receivable from the insurance entity. The insurance entity took an investigation on January 15, 2020 and concluded that cause of the fire was not due to some fortuitous event. The reporting date of the company is on December 31, 2019 and the financial statements were approved for issue on March 31, 2020.

1. What is the adjusting journal entry should be made?

2. How much is the total loss to be recorded by the company?