Pasadena company sold some machinery to the Rodac Company on January 1, 2019, for which the selling price was P7,582,00. Rodac entered into an installment sale contract with Pasadena at an interest rate of 10%. The contract required payments of P2,000,000 a year over 5 years with the first payment due on December 31, 2019.

Required:

1. What amount of interest income should be reported on December 2020 income statement using effective interest method?

2. What is the carrying amount of the note on December 2020?