Choose the letter of the correct answer At the beginning of the current year, an entity purchased an equipment for P 4,000,000 and received government grant of P 500,00 with respect to this asset. The...

Choose the letter of the correct answer

At the beginning of the current year, an entity purchased an equipment for P 4,000,000 and received government grant of P 500,00 with respect to this asset. The equipment is depreciated on a straight-line basis over 5 years. The residual value of the equipment is P 200,000. The entity use deduction from asset approach. What would be the journal entry to recognize the grant income for the year?


a. Debit to Deferred grant income P 660,000 and Credit to Grant income P 660,000
b. Debit to Deferred grant income P 760,000 and Credit to Grant income P 760,000
c. Debit to Deferred grant income P 100,000 and Credit to Grant income P 100,000
d. None