1. On January 1, 2020, Optimistic Company was granted by a local government authority 5,000 hectares of land located near the slums outside the city limits.

The condition attached to this grant was that the entity shall clean up this land and lay roads by employing laborers from the village where the land is located.

The government has fixed the minimum wage payable to the workers.

The entire operation will take 3 years and is estimated to cost P10,000,000.

This amount will be spent P2,000,000 for 2020, P2,000,000 for 2021 and P6,000,000 for 2022.

The fair value of this land is P12,000,000.

Prepare the journal entry for 2020 in connection with this grant