Crane Inc. leased a new crane to Ayayai Construction Inc. under a six-year, non-cancellable contract starting February 1, 2020. The lease terms require payments of $20,500 each February 1, starting February 1, 2020. Crane will pay insurance and repair and maintenance charges on the crane, which has an estimated life of 12 years, a fair value of $160,000, and a cost to Crane of $160,000. The crane's estimated fair value is $50,000 at the end of the lease term. No bargain purchase or renewal options are included in the contract. Both Crane and Ayayai have calendar year ends and use IFRS 16. Collectibility of the lease payments is reasonably certain and there are no uncertainties about unreimbursable lessor costs. Ayayai's incremental borrowing rate is 8% and Crane implicit interest rate of 7% is known to Ayayai. Part 1 Your answer is correct. Would the classification of the lease have been different if Crane and Ayayai had been using ASPE? Yes Part 2 Prepare all the entries related to the lease contract and leased asset for the year 2020 for the lessee and lessor, assuming the following executory costs: insurance of $400 covering the period February 1, 2020, to January 31, 2021 and a one-year maintenance contract beginning February 1, 2020 costing $1,180. Straight-line depreciation is used for similar leased assets. The crane is expected to have a residual value of $19,000 at the end of its useful life. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Lessee's Entries Date Account Titles and Explanation Debit Credit (To record inception of lease and first lease payment.) (To record interest.) (To record depreciation expense.) Lessor's Entries Date Account Titles and Explanation Debit Credit (Collection of rent.) (To record prepayments.) (To record rent revenue.) (To record expired prepayments.) (To record depreciation expense.)