A company that follows IFRS entered into two lease agreements for the acquisition of equipment during 20x8:

Lease 1	Date of lease inception and first lease payment	Jan 2, 20x8
	FV of equipment	$150,000
	Lease term	8 years
	Useful life	10 years
	Residual value:	Unguaranteed
	- end of lease term	$15,000
	- end of useful life	$10,000
	Interest rate implicit in lease	5%
Lease 2	Date of lease inception and first lease payment	July 1, 20x8
	FV of equipment	$90,000
	Lease term	4 years
	Useful life	8 years
	Residual value:	Guaranteed
	- end of lease term	$25,000
	- end of useful life	$9,000
	Interest rate implicit in lease	7%
	Annual maintenance costs payable on July 1 of each year	$4,000
	Estimate of fair value of asset at the end of the lease term	$12,000

Lease payments made under each of these leases were debited to Administrative expenses. No other entries were made for the leases. For both leases, the lessor took into account the residual value at the end of the lease term when calculating the lease payments.

2

Required

For each of the leases -

1. Prepare the adjusting journal entries at December 31, 20x8 for each of the two lease agreements.
2. Prepare the journal entries for the year ended December 31, 20x9.

Assume ASPE. Redo parts (a) and (b) for both leases.