boomboom, Inc. has been operating its powerplant in Davao for 15 years in order to supply energy to surrounding areas. On December 17, 2020, there was a minor chemical leak. this was resolved immediately on December 19, 2020. on December 27, 2021, there was a major chemical leak that leads to an explosion resulting in a fire that damaged the surrounding areas. The company's legal counsel believed that damages amounting to 8,000,000 will be paid. The company has a 20,000,000 comprehensive public liability insurance plan with a 500,000 deductible clause. on January 5, 2021, before the financial statements were issued, the company settled the lawsuit with the residents out-of-court for 3,000,000.

how much provision should be recognized in the income statement as of December 31, 2020?