On May 1, 2019, the Madison Company purchased two new company automobiles from Ford Motors Corporation. The terms of the sale called for Madison to pay P3,924,000 on April 30, 2020. Madison gave the seller a non-interest bearing note for short-term loans of this type was 9%.

REQUIRED:

(a) Give all the necessary journal entries.

(b) At what amount should the Notes Payable be shown on the December 31, 2020 statement of financial condition of Madison Company?