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On January 1, 2019, Wood Inc., a construction company, leased an excavator from Bing Inc. The lease terms are as follows: Annual lease payments of

On January 1, 2019, Wood Inc., a construction company, leased an excavator from Bing Inc. The lease terms are as follows:

Annual lease payments of $28,800 at the beginning of each year for five years
At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $10,500
The incremental borrowing rate is 8% and the implicit rate in the lease is 7% (known by the lessee)
Wood Inc. has a December 31 year end

Prepare the journal entries for 2019 for Wood Inc. Assume Wood follows IFRS.

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Date Account Titles and Explanation Debit Credit

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