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6 . ABC is a pharmaceutical company , that needs to adopt IFRS 1 6 Leases in the reporting period ending 3 1 December 2

6. ABC is a pharmaceutical company , that needs to adopt IFRS 16 Leases in the reporting period ending 31 December 2020. ABC entered into the contract on 1st of January 2020 for 8 years, annual rental payments are $80000 at the beginning of the lease term, the machine will be returned back to the lessor. The lessor having longlasting partnership relations with ABC provided lease incentives of $7000. The economic life of a machine is 5 years. ABC incurred lease related direct costs of $30000. Provide accounting entries for 31 December 2020 and 31 December 2021.

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