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Problem Solving 1. * 2 points On January 2, 2005 Tayog Company said equipment with a carrying elnmmt ofP6,5,DDD in exchange for PI,DD0,0UO noninterest bearing note due January 2, 2008. There was no established exchange price for the equipment. The prevailing interest rate for this note on January 2. 3005 was \"1%. The present value of l at [0% for three periods is 035. J. In the 2005 income statement. what amount should be reported as interest income? 0 A. P800,000 O B. P600,000 O C.P660,000 O D. P740000 2. Based on the above info, in 2 points the 2005 income statement, what amount should be reported as gain or loss on sale of equipment? * O A. P1,500,000 gain 0 B. P100,000 loss 0 c. P500,000 gain n O D. P500000 loss