JASON Corporation acquires a new manufacturing equipment on January 1, 2020, on instalment basis. The

deferred payment contract provides for a down payment of P300,000 and an 8-year note for P3,104,160. The note

is to be paid in 8 equal annual instalment payments of P388,020, including 10% interest. The payments are to be

made on December 31 of each year, beginning December 31, 2020. The equipment has a cash price equivalent of

P2,370,000. Twentythree's financial year-end is December 31.

1. What is the acquisition cost of the equipment?

A. P3,404,160 C. P2,370,000

B. P2,804,160 D. P3,104,160

2. The amount to be recognized on January 1, 2020, as discount on note payable is

A. P1,034,160 C. P827,160

B. P310,416 D. P0

3. The amount of interest expense to be recognized in 2020 is

A. P0 C. P310,416

B. P188,898 D. P207,000

4. The amount of interest expense to be recognized in 2021 is

A. P310,416 C. P207,000

B. P188,898 D. P0

5. The carrying value of note payable at December 31, 2021, is

A. P1,689,858 C. P1,312,062

B. P1,888,980 D. P1,700,082