Extracted text: On January 1, 2020, Granada Company had an overdue 10% note payable to First Bank at P8,000,000 and accrued interest of P800,000. As a result of a restructuring agreement on January 1, 2020, First Bank agreed to the fołlowing provisions: . The principal obligation is reduced to P6,000,000. . The accrued interest of P800,000 is forgiven. • The date of maturity is extended to December 31, 2023. . Annual interest of 12% is to be paid for 4 years every December 31. The present value of 1 at 10% for 4 periods is 0.683 and the present value of an ordinary annuity of 1 at 10% for 4 periods is 3.17. 1. What is the present value of the new note payable on January 1, 2020? a. 6,380,400 b. 6,000,000 . c. 4,098,000 d. 5,464,000 2. What is the gain on extinguishment of debt to be recognized for 2020? a. 2,000,000 b. 2,800,000 c. 2,419,600 d. 1,619,600 3. What is the interest expense to be recognized for 2020? a. 720,000 b. 800,000 c. 600,000 d. 638,040