Crane Ltd., a public company following IFRS 16, recently signed a lease for equipment from Costner Ltd. The lease term is 5 years and requires equal rental payments of $27,478 at the beginning of each year. The equipment has a fair value at the leases inception of $116,500, an estimated useful life of 5 years, and no residual value. Crane pays all executory costs directly to third parties. The appropriate interest rate is 9%.

QUESTIONS:

Calculate the amount of the right-of-use asset and lease liability.

1) Prepare the initial entry to reflect the signing of the lease agreement and the first payment under the lease.

Account Titles and Explanation	Debit	Credit
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Account title
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