Assume the same information as in P20€“8.
In P The following facts pertain to a non-cancellable lease agreement between Woodhouse Leasing Corporation and McKee Electronics Ltd., a lessee, for a computer system:

Instructions
Answer the following questions, rounding all numbers to the nearest dollar.
(a) Assuming that Woodhouse Leasing Corporation€™s accounting period ends on September 30, answer the following questions with respect to this lease agreement.
1. What items and amounts will appear on the lessor€™s income statement for the year ending September 30, 2012?
2. What items and amounts will appear on the lessor€™s statement of financial position at September 30, 2012?
3. What items and amounts will appear on the lessor€™s income statement for the year ending September 30, 2013?
4. What items and amounts will appear on the lessor€™s statement of financial position at September 30, 2013?
(b) Assuming that Woodhouse Leasing Corporation€™s accounting period ends on December 31, answer the same questions as in (a) above for the years ending December 31, 2011, and 2012.
(c) Discuss the differences, if any, in the classification of the lease to Woodhouse Leasing Corporation if the company were using IFRS in its financial reporting.

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Inception date Lease term Economic life of leased equipment Fair value of asset at October 1, 2011 Residual value at end of lease term Lessor's implicit rate Lessee's incremental borrowing rate Annual lease payment due at the beginning of each year, October 1, 2011 6 years 6 years $150,690 8.5% 8.5% beginning October 1, 2011 $30,500