On January 1, Year 4, Brussel Corp. enters into a 10-year, non-cancellable contract to lease equipment from Sprout Ltd. The equipment has an estimated useful life of 11 years and a fair value of $6,000,000. The interest rate on the lease is 8%. Brussel Corp. uses the straight-line method to depreciate assets. Both companies use IFRS.

The lease contains the following provisions:

Annual lease payments of$842,000 which includes $42,000 of property tax , payable on January 1 of each year.

A guarantee by Brussel Corp. that Sprout Ltd. will realize $400,000 from selling the asset at the expiration of the lease.

A) calculate present value of minimum lease payments round to nearest dollar

B) prepare lease amortization schedule up to and including Jan 1, year 7

C) prepare journal entries Brussels corp would record year 4