L Company leased machinery on January 1, 2018 with the following information:

Annual rental payable at the end of each year : P 1,000,000

Payment to lessor to obtain long-term lease : 300,000

Cost of dismantling and restoring the asset as required by contract at present value : 330,000

Annual executor cost paid by lessee : 50,000

Lease term: 4 years

Useful life of machinery: 8 years

Implicit interest rate: 10%

Present value of ordinary annuity of 1 at 10% for 4 periods : 3.17

The contract of lease provides for neither a transfer of title nor a purchase option.

Required:

1. What is the initial lease liability on January 1, 2018?
2. What is the cost of right-of-use asset?