Iceberg Company is in the business of leasing new sophisticated equipment. Such an equipment was delivered to a lessee on January 1, 2011 under a direct financing lease with the following provisions: Cost of equipment 3,390,000 Annual rental payable at the end of year 600,000 Useful life and lease term 10 years Implicit interest rate 12% Present value of an ordinary annuity of 1 at 12% for 10 years 5,650 Present value of an ordinary annuity of 1 at 11% for 10 years 5.889 Iceberg Company incurred and paid initial direct costs of P143,400 in negotiating and arranging the lease. The equipment will revert to Iceberg Company at the end of the lease. Required: 1. Compute the total financial revenue to be recognized over the lease term. 2. Prepare all the entries on the books of Iceberg Company for 2011