On November 1, 2021, Mason Company issued P8,000,000 of its 10 year, 8% term bonds dated October 1, 2021. The bonds were sold to yield 10% with total proceeds of P7,000,000 plus accrued interest. Interest is paid every February 1 and August 1. Mason Company reports on a fiscal year ending every July 31 and amortizes premiums, discounts and bond issue costs using the straight line method. What interest expense relating to the bonds would be recognized by Mason in its income statement for the period ending July 31, 2022?

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A:

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