On January $1,2023,$ BROOKLYN Company issued a ten$-$year, $2\%$ interest$-$bearing note with face amount of $P8,000,000.$ Market rates as of that date averaged $10\%.$ The interest is payable every December $31$ of each year.

Total interest expense for the year $2024$ shall be

a$.P800,000$

c$.P406,748$

b$.P160,000$

d$.P431,422$

Carrying amount of the note payable as of December $31,2024$ shall be

a$.P4,585,645$

c$.P4,769,032$

b$.P8,000,000$

d$.P4,884,210$

Total interest expense for the year $2025$ shall be

a$.P431,422$

c$.P431,422$

b$.P458,565$

d$.P488,421$

Carrying amount of the note payable as of December $31,2025$ shall be

a$.P4,585,645$

c$.P4,769,032$

b$.P8,000,000$

d$.P4,884,210$

On April $1,2023,$ AMBASSADOR Company issued a six$-$year, $7\%$ interest$-$bearing financial liability with $P3,000,000$ face amount to finance the acquisition of investment in debt securities$.$ This investment is to be accounted for at FVTPL$.$ To reduce the accounting mismatch, the financial liability is to be accounted at FVTPL$.$ Interest is payable every March $31$ of each year.

As of December $31,2023$ and $2024,$ financial liability's fair value amounted to P$3,100,000$ and P$3,190,000,$ respectively. During $2023,$ there were no changes in the Company's own credit risk. However, during $2024,$ changes in the Company's own credit risk contributed $P30,000$ to the increase in the financial liability's fair value.

The net amount to be recognized in the Company's $2023$ profit or loss shall be

a$.$ P$210,000$ net decrease

c$.$ P$110,000$ net decrease

b$.$ P$157,500$ net decrease

d$.P257,500$ net decrease

The net amount to be recognized in the Company's $2024$ profit or loss shall be

a$.$ P$270,000$ net decrease

c$.$ P$300,000$ net decrease

b$.$ P$150,000$ net decrease

d$.$ P$240,000$ net decrease