Problem $3.$ At the beginning of the current year, Egg Company signed a ten$-$year noncancelable lease agreement to lease a storage building to a lessee under a sales type lease. The agreement required ten annual rentals payable at the end of the each year.

The fair value of building is P$3,075,000.$ However, the carrying amount of the building is P$2,460,000.$

The building has an estimated economic life of $10$ years with no residual value. At the termination of the lease, the title will be transferred to the lessee.

The implicit interest rate is $10\%$ known by the lessee. The annual total lease payment included a P$100,000$ executory cost related to the taxes on the property.

$-$ What is the minimum annual lease payment?

a$.400,000$

b$.600,000$

c$.500,000$

d$.300,000$

$-$ What is the total annual lease payment?

a$.500,000$

b$.700,000$

c$.400,000$

d$.600,000$