Cullumber Leasing Corporation, which uses IFRS 16, signs a lease agreement on January 1. 2020, to lease electronic equipment to Wal Corporation, which also uses IFRS 16. The term of the non-cancellable lease is two years and payments are required at the end of each year. The following information relates to this agreement. 1. Wai Corporation has the option to purchase the equipment for $11,000 upon the termination of the lease and this aption is reasonably certain to be exercised. 2. The equipment has a cost and fair value of $180,000 to Cullumber Leasing Corporation. The useful economic life is two years, with a residual value of $11,000. 3. Wai Corporation is required to pay $5,600 each year to the lessor for insurance costs. 4. Cullumber Leasing Corporation wants to earn a return of 9% on its investment. 5. Collectibility of the payments is reasonably predictable, and there are no important uncertainties surrounding the costs that have not yet been incurred by the lessor. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Using time value of money tables, a financial calculator, or Excel functions, calculate the lease payment that Cullumber Leasing would require from Wai Corporation. (Hint: You may find the ROUND formula helpful for rounding in Excel) (Round foctor values to 5 decimal places, e.3. 1.25124 and final answer to 2 decimal places, e. 5.52.75. Lease payments $ Prepare the journal entries on Cullumber Leasing's books to reflect the payments received under the lease and to recognize income for the years 2020 and 2021 . (Credit account titles are outomotically indented when the ameunt is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts, Round factor values to 5 decimal places, e.8. 1.25124 and final answers to 0 decimal places, e.g. 52.754. ) Prepare the journal entries on Cullumber Leasing's books to reffect the payments received under the lease and to recocniz. income for the years 2020 and 2021 . (Credit account titles are autematicolly indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account tities and enter O for the amounts. Round factor values to 5 decimal places, e.y. 1.25124 and final answers to 0 decimal places, e.3.52.754.) Assurning that Wai Corporation exercises its option to purchase the equipment on December 31, 2021, prepare the joumat entey to fellect the sale on Cullumber Leasing's books. (Credit account titles are automatically indented when the amount in Assuming that Wai Corporation exercises its option to purchase the equipment on December 31, 2021, prepare the journal entry to reflect the sale on Cullumber Leasing's books. (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 0 for the amounts. Round answers to 0 decimal places, es. 52,754.) What amount Would Wal Corporation capitalize and recognize as a lease liabelity and corresponding right-to-use asset on signing the lease? (Round answer to 0 decimal places, e. 5.52,257 )
