On January 1, 2021, Tazmanie Company issued a 3-year bonds with face value of P10,000,000 at 99. The nominal rate is 10% and the interest is payable annually on December 31. The enity paid bond issue cost of P300,000. The PV of 1 at 11% for 3 periods is 0.7312, and the PV of an ordinary annuity of 1 at 11% for 3 periods is 2.4437. The present value of bonds using 11% is: PV of principal (10,000,000 X 0.7312) 7,312,000 PV of annual interest payments (1,000,000 x 2.4437) 2,443,700 Total present value of bonds 9.755,700 The PV of 1 at 12% for 3 periods is 0.7118, and the PV of an ordinary annuity of 1 at 12% for 3 periods is 2.4018. The present value of the bonds using 12% is: PV of principal (10,000,000 x 0.7118) 7,118,000 PV of annual interest payments[1,000,000 x 2.4018) 2,401,800 Total present value of bonds 9,519,800 What is the interest expense for 2021 using the effective interest method? 1119 360 1.152.000 1.100.000 1,056,000