Athrun Industries acquired the assets and liabilities of Kira Incorporated through cash payment of P1,000,000 on January 1, 2021. In addition, Athrun will pay an additional P1,000,000 at the end of the year and transfer ownership of a land and building with fair value of P5,000,000 and estimated costs to sell of P2,000+000 to the owners of Kira. The balance sheet of Kira Incorporated are as follows: Carrying Value Cash Accounts Receivable Inventory Land & Building Equipment Accounts Payable Loans Payable Mortgage Payable Additional Information: 1,000,000 400,000 800,000 5,000,000 3,500,000 600,000 2,000,000 4,000,000 The accounts receivable include an uncollectible amount of 10%. The inventory as a Net Realizable Value of P750,000 on acquisition date. All Fixed Assets of Kira have fair values which are 25% higher than their carrying amount. All other assets except mentioned above have fair values equal to their carrying values. Loans will mature by the end of the year 2021. The prevailing market rate of interest is 12%. Requirement: 1. Compute for the goodwill or gain on bargain purchase. 2. Prepare the entries to be prepared on the books of Athrun Industries for the acquisition.