In early 2019 Woodstock Ltd., a public company, entered into a finance lease that required Woodstock to make $100,000 beginning-of-year payments for six years. The interest rate implicit in the lease was 7%; Woodstocks IBR was 6%. For accounting purposes, Woodstock calculated the present value of the lease at 6%, obtaining a value of $521,236. This amount was used in 2019 and 2020 to account for the lease liability and for straight-line depreciation of the asset under lease. In 2019, the chief accountant discovered that the company should have used the lessors rate implicit in the lease, as required by IFRS.

Required:

Prepare journal entries necessary to retrospectively correct the errors. Assume a 20% income tax rate.