QUESTION 4 (5 marks) Grainy Way is an agricultural entity who grows wheat for the local community and has a 30 June year-end. Due to harvest time being expected to start soon, Grain Way entered into a 6-month lease to rent a storage facility for its grain, for a total of R120 000. The terms of the lease indicate that no sub-letting of the storage facility is allowed and that, should either of the parties decide to cancel the lease, they would need to pay a penalty of R80 000. On 25 June 2021, prior to the harvest, extreme temperatures resulted in a snowstorm that destroyed all the crops. Grainy Way could thus no longer fulfil the lease contract because they had no crops to store and did not have any alternate use for the storage facility. The directors of Grainy Way therefore opted to cancel the contract and pay the penalty instead. REQUIRED: In accordance with IAS 37, briefly discuss how Grainy Way should account for the lease contract in its financial statements for the year ended 30 June 2021. Also indicate the general journal entry required to account for the contract. Ignore VAT and Income tax.