PARTI: JOURNAL ENTRIES Instruction : Prepare the journal entries for the following independent problems : 1. On January 1,2020, Optimistic Company was granted by a local government authority 5,000 hectares of land located near the slums outside the city limits. The condition attached to this grant was that the entity shall clean up this land and lay roads by employing laborers from the village where the land is located. The government has fixed the minimum wage payable to the workers. The entire operation will take 3 years and is estimated to cost P10,000,000. This amount will be spent P2,000,000 for 2020, P2,000,000 for 2021 and P6,000,000 for 2022. The fair value ofthis land is P12,000,000. Prepare the joumal entry for 2020 in connection with this grant. 5pts. 2. At the beginning of the current year, Peach Company purchased as machine for P7,000,000 and received a government grant of P1,000,000 toward the capital cost. The machine is to be depreciated on a straight line basis over 5 years and estimated to have a residual value of P500,000 at the end of this period. Required : Prepare the joumal entries for the current year assuming the grant is (10 pts) a) Accounted for as a deferred income b) Accounted as a deduction from asset