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Daz Company owed P2,000,000 plus P180,000 of accrued interest to Bonez Bank which is due...

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Accounting

Daz Company owed P2,000,000 plus P180,000 of accrued interest to Bonez Bank which is due to be paid on December 31, 2022. During 2022, Dazs business deteriorated because of faltering regional economy. On December 31, 2022, Bonez Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of P3,900,000, accumulated depreciation of P2,210,000 and a fair value of P1,900,000. How much is the total amount to be reported in its profit or loss as a result of the financial liability de-recognition?

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