On December 31, 2020, Gem Company sold a building, receiving as consideration a P5,000,000 non-interest-bearing note due in three years.The building had cost P4,000,000 and the accumulated depreciation was P1,500,000 at the date of sale.The prevailing rate of interest for a note of this type was 10%.Round off present value factors to two decimal places.

1.In its 2020 income statement, how much gain should Gem report on the sale?

2.How much is the 2021 interest income?

3.What is the carrying amount of the note on December 31, 2021?