On January 1, 2020, South Company acquired a building for P5,000,000. The entity paid P500,000 down and signed a noninterest bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year.

The prevailing interest rate for a note of this type is 12%. The present value of an ordinary annuity of 1 for three periods is 2.4018.

Prepare the journal entries to record the purchase of buiding on January 1, 2020, first installment payment on December 31, 2020, and interest expense for 2020.