Mundane Company purchased for cash a new building on January 1, 2020 for P10,500,000. The building had an estimated useful life of 50 years and residual value of P500,000.

Depreciation was computed on a straight line basis.

On January 1, 2022, the entity replaced the old roof with a permanent tile roof costing P3,000,000.

The cost of the old roof was P2,500,000. The new roof did not change the residual value but was considered a betterment.

Required:

Prepare journal entries to record the following:

1. Purchase of the building on January 1, 2020

2. Depreciation for 2020

3. Replacement of the old roof on January 1, 2022

4. Depreciation for 2022

Show your computation.