Note: Write the answer in Good Accounting Form

In 2015, ABC acquired several long-term assets to starts its operations. Details as follows:

March 31 - acquired land for P4, 950,000 inclusive of legal fees amounting to P50, 000. The amount due to the seller was settled with a note that requires cash payment of P700,000 on April 1,2015 and the balance payable in equal amounts every year for the succeeding four years. Similar notes were selling at an effective interest rate of 5%. The entity plans to use the land for 50 years.

April 30 - a building was purchased through the issuance of bonds payable but also required the entity to assume the mortgage from the buyer. The bonds have a 5-year term, P2,000,000 face value, 8% coupon rate. Similar bonds would yield 9%. The mortgage liability I valued at P2,000,000. The building had two years of real property tax which were not paid by the seller and assumed by the entity. The annual tax is P50,000 due every January. The entity plans to use the building for 20 years.

June 1- a manufacturing equipment was acquired and settled through exchanging its investment in shares. The shares had fair value of P5,400,000 and a par value of P4,000,000. Historically, it has not resulted to any dividends nor significant price changes. The equipment has a cash price of P5,200,000. The difference is settled in cash. Other related costs include P50,000 dismantling cost of old equipment,P560,000 input VAT included in the cash price, P100,000 import duties, and freight-in P80,000. The equipment has a useful life of 5 years ans is to be depreciated to a salvage value of P500,000.

1. CARRYING VALUE OF THE ENTITIY'S LAND ON DEC. 31, 2015

2. DEPRECIATION EXPENSE FOR THE YEAR 2015