Lalonde Ltd., a public company following IFRS, recently signed a lease for equipment from Costner Ltd. The
Question:
Lalonde Ltd., a public company following IFRS, recently signed a lease for equipment from Costner Ltd. The lease term is five years and requires equal rental payments of $25,173 at the beginning of each year. The equipment has a fair value at the lease’s inception of $112,400, an estimated useful life of five years, and no residual value. Lalonde pays all executory costs directly to third parties. The appropriate interest rate is 6%. Prepare Lalonde’s journal entries at the inception of the lease.
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