Case 1: ABC Finance Corp. leased an equipment with a cost of P700,000 to XYZ on January 1, 2018. The company incurred direct cost related to the negotiation and arranging the lease agreement at P20,955. Under the lease agreement appropriately accounted for on the books of ABC as a direct finance lease, since ABC is engaged solely in financing operations, XYZ shall pay P200,000 annually for five years every December 31, starting 2018. The equipment has a useful life of five years. The implicit lease rate as a result of the direct lease cost was at 12%. 1. How much profit from sale should be immediately recognized by ABC Finance Corp.? 2. What is the interest income should be recognized by ABC Finance Corp. in 2019? 3. What is the balance of the lease receivable as of December 31, 2019