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Raquel Company purchased a machine for P3,000,000 on January 1, 2020. The entity received a government grant of P500,000 in respect of this asset. The policy is to depreciate the asset over 5 years on a straight-line basis and to treat the grant as deferred income. On January 1, 2022, the grant became fully repayable because of noncompliance with conditions.
Required:
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