On January 1, 2020, BSA Company loaned money to ABC Company in exchange for 12%, one-year promissory note. On August 31, 2020, the promissory note was discounted at 15% and received P622,440.00 as proceeds. Compute for the gain or loss on discounting of the promissory note. (Show computations). Prepare the entries on January 1, 2020 and on August 31, 2020.

A. Compute for the following: (2 points for every correct answer)

1. Maturity Value
2. Principal amount of the loan
3. Carrying Amount on August 31, 2020 (Use 12 months)
4. Gain or loss on discounting of the promissory note

B. Prepare the entries (1 point for every correct entry)