On January 1, 2019, a corporation issued P2,000,000 of 8% convertible bonds at par. The bonds will mature on January 1, 2023 and interest is payable annually every January 1. The bond contract entitles the bondholders to receive 6, P100 par value, ordinary shares in exchange for each P1,000 bond. On the date of issue, the prevailing market interest rate for similar debt without the conversion portion is 10%. On January 1, 2023, the holders of the bonds with total face value of P1,000,000 exercised their conversion privilege. On that date, the bonds were selling at 110 and the ordinary share at P42. Determine the (1) proceeds from issuance allocated to the equity component and the (2) gain to be recognized on conversion P634,000 and P463,408 OP221,664 and PO OP221.664 and P463,408 O P126.816 and PO