On January 1, 2021, an entity leased two automobiles for executive use. The lease required the entity to make five annual payments of P2,000,000 beginning December 31, 2021 . At the end of the lease term, December 31, 2025, the entity had a residual value guarantee of the automobiles atP1,000,000. The interest rate implicit in the lease is 10% and present value factors at 10% for 5 periods are 4.17 for an annuity due, 3.79 for an ordinary annuity and 0.62 for present value of 1. 1. What is the lease liability on December 31, 2021? a. 7,020,000 b. 5,722,000 c. 7,580,000 d. 6,338,000 2. What is the current portion of the lease liability on December 31, 2021?

a. 2,000,000

b.1,298,000

c. 820,000

d. 500,000

3. What is the interest expense for 2021 ?

a. 758,000

b. 820,000

c.834,000

d. 896,000