On January 1, 2018, Reston Company bought 25% outstanding ordinary shares of Ace Company for P1 million. The book value of the net asset acquired was P3 million. The difference was attributable to the fair value of Ace's machinery exceeding book value. The machinery has a remaining life of 10 years. 0n January 3, 2018, Reston Company sold an equipment costing P600,000 to Ace Company for P800,000. The equipment has a remaining life of five years. In 2018, Ace Company reported net income of P1,000,000. Cash dividends of P100,000 were declared and paid by Ace Company on December 31, 2018.

How much is the carrying amount of the investment in associate on December 31, 2018?