Cranston LTD. prepares its financial statements according to International Financial Reporting Standards. In October 2021, the company received a $4 million government grant. The grant represents 16% of the total cost of equipment that will be used to improve the roads in the local area. Cranston recorded the grant and the purchase of the equipment as follows:

1. Record the correcting entry assuming that the company allows for the deduction of the grant in determining the initial cost of the asset.

2. Record the correcting entry assuming that the company records the grant as a liability, deferred income.

4,000,000 Cash Revenue Equipment Cash 4,000,000 25,000,000 25,000,000