Please help answer all, I have my own answer on the problem, but I have doubts on my approach, with solution if possible.

On January 1, 2022, Davao Company borrowed P4,000,000 on a 6% 4-year interest-bearing note. The net proceeds from the borrowing amounted to P3,677,600. Interest is payable annually every December 31. The entity elected the fair value option. On December 31, 2022, the bonds are quoted at 95.

1. What amount should be reported as interest expense for 2022? a. 240,000 b. 120,000 c. 294,208 d. 220,256

2. What amount should be reported as gain or loss from change in fair value for 2022? a. 322,400 gain b. 322,400 loss c. 122,400 gain d. 122,400 loss

3. What is the carrying amount of the note payable on December 31, 2022? a. 3,677,600 3,800,000 c. 3,493,720 d. 4,000,000

4. Prepare Journal Entries for 2022