On January 01, 2020, Three Corporation sold its building to Four company. As consideration for the sale, Three received cash amounting to P300,000 and a non-interest bearing promissory note amounting to P3,375,000 due on December 31, 2025. The note provides for equal annual payments every December 31, starting this year 2020. There is no cash price equivalent or fair value of the building available, but similar notes in the market indicate the market rate of 10%.

The building had an acquisition cost of P5,000,000, an estimated useful life of 10 years, and no residual value. At the time of sale, the building was three years depreciated. (Round present value factor to 4 decimal places; round also your final answer to the nearest peso).

1. What is the gain or loss from the disposal of the building? (If loss, enclose in parenthesis; input the answer e. g. 50,000)

2. What is the interest income for the year 2022? (Input the answer e. g. 50,000)

3. What is the amount to be presented as the current portion of the notes receivable in the statement of financial position for the year ended December 31, 2023? (Input the answer e. g. 50,000)

Answer rating: 100% (QA)

Note amortization schedule Date Beginning net note receivable Interest income Pa... View the full answer