Equipment Lease Data Sheet FOR IFRS

* Total package of equipment leased has a fair market value of $4,800,000

*Lessor Management stated that they used a rate of return of 6% for their calculations, based on a 8 year term and a guaranteed minimum value for the equipment at termination of the lease of $600,000

*First payment of $672,030 was paid on July 2 when the lease was signed, with subsequent payments due on July 1st each year.

*Lease payments are included in operating expenses by Williams corporation as they are paid

*Williams Management believes that, at a minimum, at the termination of the lease the equipment could be sold for an expected value of $440,000. Williams uses the straight line method of depreciation for its property plant and equipment

Required: Show all your work Calculations and Journal entries for the problem