On January 1, 2021, Jerome Company signed a 12-year lease for a building. The entity has an option to renew the lease for an additional 6-year period on or before January 1, 2025. During January 2024, the entity made substantial improvement to the building. The cost of the improvement was P4,500,000 with an estimated useful life of 10 years. On December 31, 2024, the entity intended to exercise the renewal option. The entity has taken a full year depreciation on this improvement. On December 31, 2024, what is the carrying amount of the leasehold improvement?

4,500,000

4,200,000

4,000,000

4,050,000