Question number 1. use the following information for the next two questions:

On january 1 20x1 an entity has oustanding note payable with carrying amount of P 1,000,000.

First Question: On this date, the debtor agrees to receive equipment with historical cost of 1,800,000, accumulated depreciation of P 900,000 and fair Value of P 850,000 in full settlement of the note payable.

A. What is the gain or loss on the derecognition of note payable?

Second Question: On this day, the debtor agrees to receive 10,000 shares of the entity with par value per share of P10 in full settlement of the note payable. the shares are currently selling at P75 per shares.

A. What is the gain or loss on the derecognition of the note payable?

B. What is the entry to record the decognition of the note payable?

Question number 2. An entity has oustanding bank loan . On december 31 20x1 the entity agrees to the following maodification to tge terms of the loan payable:

The principal is reduced from

P 2,800,000 to P 2,500,000.

The bank promises not to collect the accrued interest of P 400,000.

The nominal rate is decreased from 14% to 9%.

The maturity date is extended from December 3q 20x1 to January 1 20x6.

The principal is due in lump sum at maturity date but interest is payable annually at each yaer end. The original effective interest rate 14%. The prevailing rate on december 31 20x1 is 12%.

A. what is the entry to record the modification of the loan?

Question number 3. On january 1 20x1 an entity issues bonds with face amount of P 4,000,000 for P 4,100,000. The bonds mature on December 31 20x4 and pay annual interest of 16%. The bonds can be converted into 10,000 ordinary shares of the entity with par value per share of P 300. On January 1 20x1 the bonds without the conversion features are selling at price which is reflect a yield rate of 18%. tAll of the bonds are converted into ordinary shares on january 1 20x3.

A. What is the entry on january 1 20x1 to record the issuance of the convertible bonds?

B. What is the entry on january 1 20x3 to record the conversation of the bonds?