On January 1, 2020, Lavery Corp., which follows ASPE, leased equipment to Sunland Ltd., which follows IFRS 16. Both Lavery and Sunland have calendar year ends. The following information concerns this lease. 1. The term of the non-cancellable lease is six years, with no renewal option. The equipment reverts to the lessor at the termination of the lease, at which time it is expected to have a residual value (not guaranteed) of $6,600. Sunland Ltd. depreciates all its equipment on a straight-line basis. 2. Equal rental payments are due on January 1 of each year, beginning in 2020. 3. The equipment's fair value on January 1, 2020, is $145,000 and its cost to Lavery is $111,000. 4. The equipment has an economic life of seven years. 5. Lavery set the annual rental to ensure a 11% rate of return. Sunland's incremental borrowing rate is 12% and the lessor's implicit rate is unknown to the lessee. 6. Collectibility of lease payments is reasonably predictable and there are no important uncertainties about any unreimbursable costs that have not yet been incurred by the lessor. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Using time value of money tables, a financial calculator, or Excel spreadsheet functions, calculate the amount of the annual rental payment. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to o decimal places, e.g. 5,275.) Annual rental payment tl Prepare all necessary journal entries and adjusting entries for Sunland for 2020. (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 o for the amounts. Record journal entries in the order presented in the problem. 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 (To record inception and payment of lease.) (To record depreciation expense.) (To record interest.) Prepare all necessary journal entries and adjusting entries for Lavery for 2020. (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 o for the amounts. Record journal entries in the order presented in the problem. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to o decimal places, e.g. 5,275.) Date Debit Credit Account Titles and Explanation 1/1/20 (To record inception of lease and cost of goods sold.) (Collection of lease payment.) (To record interest.) TABLE PV.1 Present Value of 1 (11) periods 3 9 0 10 11 2% 0.98039 0.96117 0.94232 0.92385 0.90583 0.88797 0.87056 0.85349 .83676 0.82035 0.80426 0.78849 0.77303 0.75788 0.74301 0.72845 0.71416 0.70016 .68643 0.67297 24% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 0.97561 0.97087 0.96156 0.95238 0.94340 0.93458 0.92593 0.91743 0.90909090090 0.89286 0.86957 0.95181 0.94260 0.92456 0.90703 0.89000 0.87344 0.85734 0.84168 0.82645 0.81162 0.79719 0.75614 0.92860 0.91514 0.88900 0.86384 0.83962 0.81630 0.79383 0.77218 0.75132 0.73119 0.71178 0.65752 0.90595 0.88849 0.85480 0.82270 0.79209 0.76290 0.73503 0.70843 0.68301 0.65873 0.63552 0.57175 0.88385 0.86261 0.82193 0.78353 0.74726 0.71299 0.68058 0.64993 0.62092 0.59345 0.56743 0.49718 0.86230 0.83748 0.79031 0.74622 0.70496 0.66634 0.63017 0.59627 0.56447 0.53464 0.50663 0.43233 0.84127 0.81309 0.75992 0.71068 0.66506 0.62275 0.58349 0.54703 0.51316 0.48166 0.45235 0.37594 0.82075 0.78941 0.73069 0.67684 0.62741 0.58201 0.54027 0.50187 0.46651 0.43393 0.40388 0.32690 0.80073 0.76642 0.70259 0.64461 0.59190 0.54393 0.50025 0.46043 0.42410 0.39092 0.36061 0.28426 0.78120 0.74409 0.67556 0.61391 0.55839 0.50835 0.46319 0.42241 0.38554 0.35218 0.32197 0.24719 0.76214 0.72242 0.64958 0.58468 0.52679 0.47509 0.42888 0.38753 0.35049 0.31728 0.28748 0.21494 0.74356 0.70138 0.62460 0.55684 0.49697 0.44401 0.39711 0.35554 0.31863 0.28584 0.25668 0.18691 0.72542 0.68095 0.60057 0.53032 0.46884 0.41496 0.36770 0.32618 0.28966 0.25751 0.22917 0.16253 0.70773 0.66112 0.57748 0.50507 0.44230 0.38782 0.34046 0.29925 0.26333 0.23199 0.20462 0.14133 0.69047 0.64186 0.55526 0.48102 0.41727 0.36245 0.31524 0.27454 0.23939 0.20900 0.18270 0.12289 0.67362 0.62317 0.53391 0.45811 0.39365 0.33873 0.29189 0.25187 0.21763 0.18829 0.16312 0.10687 0.65720 0.60502 0.51337 0.43630 0.37136 0.31657 0.27027 0.23107 0.19785 0.16963 0.14564 0.09293 0.64117 0.58739 0.49363 0.41552 0.35034 0.29586 0.25025 0.21199 0.17986 0.15282 0.13004 0.08081 0.62553 0.57029 0.47464 0.39573 0.33051 0.27651 0.23171 0.19449 0.16351 0.13768 0.11611 0.07027 0.61027 0.55368 0.45639 0.37689 0.31180 0.25842 0.21455 0.17843 0.14864 0.12403 0.10367 0.06110 13 19 0 TABLE PV.2 Present Value of an Annuity of 1 PV = 1 - sito (n) Periods 2% 24% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 15% 10 0.98039 1.94156 2.88388 3.80773 4.71346 5.60143 6.47199 7.32548 8.16224 8 .98259 9.78685 10.57534 11.34837 12.10625 12.84926 13.57771 14.29187 14.99203 15.67846 1 6.35143 0.97561 0.97087 1.92742 1.91347 2.85602 2.82861 3.76197 3.71710 4.64583 4.57971 5.50813 5.41719 6.349396.23028 7.170147.01969 7.970877.78611 8.75206 8.53020 9.51421 9.25262 10.25776 9.95400 10.98319 10.63496 11.69091 11.29607 12.38138 11.93794 13.05500 12.56110 13.71220 13.16612 14.35336 13.75351 14.97889 14.32380 15.58916 14.87747 0.96154 1.88609 2.77509 3.62990 4.45182 5.24214 6.00205 6.73274 7.43533 8.11090 8.76048 9.38507 9.98565 10.56312 11.11839 11.65230 12.16567 12.65930 13.13394 13.59033 0.95238 0.94340 0.93458 0.92593 1.85941 1.83339 1.80802 1.78326 2.72325 2.67301 2.62432 2.57710 3.54595 3.46511 3.38721 3.31213 4.32948 4.21236 4.10020 3.99271 5.075694.91732 4.76654 4.62288 5.78637 5.58238 5.38929 5.20637 6.463216.20979 5.97130 5.74664 7.10782 6.80169 6.51523 6.24689 7.721737.36009 7.02358 6.71008 8.30641 7.88687 7.49867 7.13896 8.863258.38384 7.94269 7.53608 9.39357 8.85268 8.35765 7.90378 9.89864 9.294988.74547 8.24424 10.37966 9.71225 9.10791 8.55948 10.83777 10.105909.44665 8.85137 11.27407 10.47726 9.76322 9.12164 11.68959 10.82760 10.05909 9.37189 12.08532 11.15812 10.33560 9.60360 12.46221 11.46992 10.59401 9.81815 0.91743 0.90909 0.90090 0.89286 0.86957 1.75911 1.73554 1.71252 1.69005 1.62571 2.53130 2.48685 2.44371 2.40183 2.28323 3.23972 3.16986 3.10245 3.03735 2.85498 3.88965 3.79079 3.69590 3.60478 3.35216 4.48592 4.35526 4.23054 4.11141 3.78448 5.03295 4.86842 4.71220 4.56376 4.16042 5.53482 5.33493 5.14612 4.96764 4.48732 5.99525 5.759025.53705 5.32825 4.77158 6.41766 6.14457 5.88923 5.650225.01877 6.80519 6.49506 6.20652 5.93770 5.23371 7.16073 6.81369 6.49236 6.19437 5.42062 7.48690 7.10336 6.74987 6.42355 5.58315 7.78615 7.36669 6.98187 6.62817 5.72448 8.06069 7.60608 7.19087 6.81086 5.84737 8.31256 7.82371 7.37916 6.97399 5.95424 8.54363 8.02155 7.54879 7.11963 6.04716 8.75563 8.20141 7.701627.24967 6.12797 8.95012 8.36492 7.839297.36578 6.19823 9.12856 8.51356 7.96333 7.46944 6.25933 13 14 20