1. On January 1, 2021, Cannon Company entered into a 10-year lease requiring year-end payments of P1,000,000. The incremental borrowing at the time of the transaction is 12%, while the lessors implicit interest rate of 10%. The PV factor for an ordinary annuity for ten-year periods are: 6.145 at 10% and 5.650 at 12%. On the same data, Cannon Co. paid initial direct cost of P200,000 in negotiating and securing the leasing arrangement. The ownership of the property will remain to the Lessor until after the expiration of the contract. The leased property has an estimated life of 12 years. a. How much is the cost of the Right-of-Use Asset? b. What is the depreciation for the current year? c. What is the Lease Liability at the end of the current year?