Cullumber Mining Corporation, a public company whose stock trades on the Toronto Stock Exchange, uses IFRS. The vice-president of finance has asked you, the assistant controller, to prepare the company's current accounting of a lease. The lease was signed by Cullumber on April 1, 2023, with Bertrand Ltd. for a piece of excavation equipment. The following information relates to the agreement. 1. The term of the non-cancellable lease is three years, with a renewal option of one additional year at the annual rate of 130% of the initial payment. The equipment has an estimated economic life of 10 years. 2. The asset's fair value at April 1,2023 , is approximately $1.1 million. 3. The asset will revert to Bertrand at the end of the initial term of the lease, or at the end of the renewal period if Cullumber exercises that option. The excavation equipment is expected to have a fair value of $630,000 on March 31,2026 , and $530,000 on March 31,2027 , which is not guaranteed. 4. Cullumber assumes direct responsibility for all executory costs for the excavation equipment. 5. The initial term of the lease agreement requires equal annual rental payments of $135,000 to Bertrand, beginning on April 1 , 2023. 6. The lessee's incremental borrowing rate is 10%. Bertrand's implicit rate is 9% and is known to Cullumber. 7. Cullumber has a calendar year end. Cullumber's operations manager says that there is a 95% chance that the renewal period will be exercised. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. (a) Using any of the following methods: (1) factor tables, (2) a financial calculator, or (3) Excel functions, determine the amount of the liability for lease payments at the signing of the lease. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.) Lease payments liability $ eTextbook and Media Assistance Used