Kingpin Co$.$ had a liability that has a maturity date of December $31,2023.$ However, due to business financial struggles that the company experienced for the past years, it was not able to settle the liability. Consequently, the lender agreed with the following terms of the load:

$-$Reduction of face amount from P$10,000,000$ to P$6,000,000$

$-$ Waiving of the P$800,000$ accrued interest as of Dec. $31,2023$

$-$ Reduction of interest rate to $6\%$

$-$ extending the maturity date to Dec. $31,2027.$

Market rates as of the date of modification averaged $7\%.$ Modifications amounted to P$200,000.$

$*$Note: the company is using the contemporary approach

The amount of net gain on extinguishment shall be

$*$

$1$ point

$5,197,454$

$4,997,454$

$5,003,234$

$4,803,234$

The initial measurement of the new liability shall be

$*$

$1$ point

$5,402,546$

$5,602,546$

$5,596,766$

$5,796,766$

The amount of interest expense for the year $2024$ shall be

$*$

$1$ point

$405,774$

$448,204$

$468,985$

$412,789$