PROBLEM 4: Swan Company is a dealer in equipment. On January 1, 2018, the entity had the following sales of equipment: The entity sold an equipment in exchange for an 12% interest-bearing note requiring five equal annual payments of P400,000. The first payment was made on December 31, 2018. The entity sold an equipment in exchange for a non-interest bearing note with a face amount of P2,500,000 due on December 31, 2020. The market interest rate for similar notes was 8%. PV of 1 at 8% for 3 periods 0.79 PV of an ordinary annuity of 1 at 8% for 3 periods 2.58 5. What amount of interest income should be reported for 2018? A. 240,000 B. 350,000 C. 398,000 D. 440,000 6. What is the total carrying amount of the notes receivable on December 31, 2019? A. 3.333.000 B. 3,503,640 C. 3,733,000 D. 3,903,640 1