At the beginning of year 2020, Romero Company leased an equipment with the following provisions:

Annual lease payments due at the end of each period P200,000

Purchase option that is not reasonably certain to be exercised 60,000

Initial direct cost paid 70,000

Lease incentives received 30,000

Lease bonus paid to lessor before commencement of lease 20,000

Present value of dismantling cost as required by contract discounted at 6%, 40,000

Lease term 5 years

Useful life of building 8 years

Interest rate implicit in the lease 8%

1.What is the initial lease liability?

2. What is the initial cost of right to usage of equipment?

3.How much is the depreciation for 2020?

4. What is the lease liability on December 31, 2020?