Problem 3. On December 31, 2019, Zhongli Co. sold land costing P250,000 to Mona Co. Mona was short of cash, and Zhongli Co. agreed to accept a P300,000 12% interest-bearing note due December 31, 2021, as payment in full. The market rate of interest for a note of similar risk is 10%.

Instructions:

• Prepare the journal entry to record the transaction of December 31, 2019, for Zhongli Co.
• Assuming Zhongli Co.'s fiscal year-end is December 31, prepare the journal entry for December 31, 2020.

Assuming Zhongli Co.'s