On May 1, the XYZ Co. purchased factory machinery having an installment price of ₱6,000,000 and a list price of ₱5,500,000. The company made a ₱1,000,000 down payment and issued a 4-year, 4 million non-interest bearing note payable ₱1,000,000 every May 1 starting next year. The prevailing interest rate for similar note is at 6%.



How much should the factory machinery be initially recognized?

Assuming an estimated useful life of 5 years with a 10% salvage value based on cost, what is the depreciation expense for the first year under the 150% declining balance method?