CASE 3: The following information were deemed relevant regarding a sale and leaseback agreement ABC Corp. entered into with XYC Inc. of a heavy factory equipment on January 1, 2018: Selling Price of the Equipment P900,000 Fair Market Value 1,000,000 Carrying value on the books of ABC Corp. 600,000 Remaining life of the equipment 10 years Lease back term 5 years Implicit lease rate 10% Periodic annual rentals every December 31 P150,000 Required: 1. What is the gain/loss to be recognized from the sale and leaseback agreement on the books of ABC Corp. (seller/lessee) on January 1? 2. What is the debit to the right of use asset on January 1, on the books of ABC Corp.? 3. What is the interest expense to be recognized in 2018? 4. What is the carrying value of the lease liability as of December 31, 2018? 5. What is carrying value of the right of use asset as of December 31, 2018