On January 1, 2020, Surigao Company issued bonds with face amount of P4,000,000 and stated interest rate of 12%. The interest is payable semiannually on June 30 and December 31. The bonds mature on every December 31 at the rate of P2,000,000 per year for 2 years. The prevailing market rate for the bonds is 8%.
Present value of 1 at 4%

One period - 0.9615
Two periods - 0.9246
Three periods - 0.8990
Four periods - 0.8548
Required:
1. Compute the market price of the bonds on January 1, 2020.
2. Prepare a table of amortization using the effective interest method.
3. Prepare journal entries for 2020 and 2021.