Dumb Company constructed its own factory building. The company had a P1,000,000 two-year 12% loan specifically obtained to finance the asset construction. The construction began on January 1, 2021 and the building was completed on December 30, 2022. Expenditures on the building were made as follows:
January 1, 2021 P800,000
April 30, 2021 300,000
November 1, 2021 600,000
March 1, 2022 600,000
September 30, 2022 400,000
Dumb has the following outstanding loans from general borrowings:
10% note issued prior to construction of new building; term,
10 years
1,500,000
12% note issued prior to construction of new building; term,
15 years
2,500,000

How much is total initial cost of the building?
How much is the finance cost that should be recognized in profit or loss for the year 2022?