Grafton Inc. leased a new office furniture for two years on January 1, 2019, with the following details:

Requirement a. Assume that Greenland Inc. elects to expense leases of low-value assets. Prepare the journal entries for 2019 and January 1,2020.

Requirement b. Assume that Greenland Inc. does not elect to expense leases of low-value assets. Prepare the journal entries for 2019 and January 1, 2020.

- Lease details . Payments: $2,700 per annum first due at the commencement date. Interest rate implicit in the lease: 7%; however, lessee is not able to readily determine this. Incremental borrowing rate: 6% per annum. Estimated useful life of equipment: 6 years. 6 Other: Title does not transfer. The leased item is not dependent upon or highly interrelated with other assets. Depreciation method: Straight-line. Year-end: December 31. . Date Accounts Debit Credit Jan. 1 2019 Office furniture rental expense Cash Date Accounts Debit Credit Jan. 1 2020 Date Accounts Debit Credit Jan. 1 2019 Right-of-use asset Lease liability Cash Date Accounts Debit Credit Dec. 31. 2019 Interest expense Text Lease liability Date Accounts Debit Credit Dec. 31 2019 Depreciation expense Accumulated depreciation Date Accounts Debit Credit Jan. 1 2020 Lease liability Cash