Dubois Steel Corporation, as lessee, signed a lease agreement for equipment for five years, beginning January 31, 2020. Annual rental payments of $41,000 are to be made at the beginning of each lease year (January 31). The insurance and repairs and maintenance costs are the lessee's obligation. The interest rate used by the lessor in setting the payment schedule is 9%; Dubois's incremental borrowing rate is 10%. Dubois is unaware of the rate being used by the lessor. At the end of the lease, Dubois has the option to buy the equipment for $4,000, which is considerably below its estimated fair value at that time. The equipment has an estimated useful life of seven years with no residual value. Dubois uses straight-line depreciation on similar equipment that it owns, and follows IFRS 16. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Using time value of money tables, a financial calculator, or Excel functions, calculate the PV of the lease obligation. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to decimal places, e.g. 5,275.) Present value $ List of Accounts Prepare the lease amortization schedule for the lease. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round answers to O decimal places, e.g. 5,275.) Dubois Steel Corporation (Lessee) Lease Amortization Schedule (Annuity Due Basis) Annual Lease Payment Interest on Unpaid Liability Reduction of Lease Liability Bali of L Liat Date 1/31/20 1/31/20 $ 1/31/21 1/31/22 Prepare the lease amortization schedule for the lease. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round answers to 0 decimal places, e.g. 5,275.) Dubois Steel Corporation (Lessee) Lease Amortization Schedule (Annuity Due Basis) Annual Lease Payment Interest on Unpaid Liability Reduction of Lease Liability Bali of L Liat Date 1/31/20 1/31/20 $ 1/31/21 1/31/22 1/31/23 1/31/24 1/31/25 List of Accounts Prepare the journal entry that should be recorded on January 31, 2020, by Dubois. (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 factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 31. 2020 Question 1 of 1 - / 1 ili Prepare the journal entry that should be recorded on January 31, 2020, by Dubois. (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 factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Jan. 31 2020 (To record inception of lease and first lease payment.) List of Accounts Prepare any necessary adjusting journal entries at December 31, 2020, and the journal entry or entries that should be recorded on January 31, 2021, by Dubois. Dubois does not use reversing entries. (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 for the amounts. Round answers to decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31 2020 (To record depreciation expense.) Dec. 31, 2020 Question 1 of 1 -/1 Prepare any necessary adjusting journal entries at December 31, 2021, and the journal entry or entries that should be recorded on January 31, 2022, by Dubois. (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 Ofor the amounts. Round answers to decimal places, eg. 5,275.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 (To record depreciation expense.) Dec. 31, 2021 (To record interest.) Jan. 31, 2022 (To record lease payment.) List of Accounts What amounts would appear on Dubois's December 31, 2021 SFP relative to the lease arrangement? (Round answers to O decimal places, e.g. 5,275.) P20-14 Question 1 of 1
