On January 1, 20x1, an entity has an outstanding note payable with carrying amount of P1,000,000. On this date, the debtor agrees to receive equipment with historical cost of P1,800,000, accumulated...

On January 1, 20x1, an entity has an outstanding note payable with carrying amount of P1,000,000. On this date, the debtor agrees to receive equipment with historical cost of P1,800,000, accumulated depreciation of P900,000 and fair value of P850,000 in full settlement of the note payable. Requirement: Compute for the gain or loss on the derecognition of the note payable.