On January 1, 2020,crane corpeCorp., which uses IFRS, signs a10-year, non-cancellable lease agreement to lease a specialty lathe from Liu Inc. The following information concerns the lease agreement.

1.The agreement requires equal rental payments of $76,935beginning on January 1, 2020.2.The lathe's fair value on January 1, 2020, is $500,000.3.The lathe has an estimated economic life of12years, with an unguaranteed residual value of $17,000.Carla VistaCorp. depreciates similar equipment using the straight-line method.4.The lease is non-renewable. At the termination of the lease, the lathe reverts to the lessor.5.Carla Vista's incremental borrowing rate is10% per year. The lessor's implicit rate is not known byCarla VistaCorp.6.The yearly rental payment includes $2,959.82of executory costs related to insurance on the lathe.

Assume this is a manufacturer/dealer lease.

Click here to view the factor table PRESENT VALUE OF 1.

Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.

Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the right-of-use asset and lease liability and prepare the initial entry to reflect the signing of the lease agreement.(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 0 for the amounts. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 2 decimal places, e.g. 5,275.25.)

Date

Account Titles and Explanation

Debit

Credit

1/1/20

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

List of Accounts

Prepare an amortization schedule for the term of the lease to be used byCarla Vista. Use Excel.(Round answers to 2 decimal places, e.g. 5,275.25.)

CARLA VISTACORP.

Lease Amortization Schedule

(Lessee)DateAnnual

Payment

Excluding

Executory

CostsInterest on

Unpaid

ObligationReduction

of Lease

ObligationBalance

of Lease

Obligation$

enter a dollar amount

Jan. 1, 2020

$

enter a dollar amount

$

enter a dollar amount

enter a dollar amount

Jan. 1, 2021

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2022

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2023

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2024

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2025

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2026

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2027

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2028

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

Jan. 1, 2029

enter a dollar amount

enter a dollar amount

enter a dollar amount

enter a dollar amount

$

enter a total amount

$

enter a total amount

$

enter a total amount

List of Accounts

Prepare the journal entries onCarla VistaCorp.'s books to record the payments and expenses related to this lease for the years 2020 and 2021 as well as any adjusting journal entries at its fiscal year ends of December 31, 2020 and 2021.Carla Vistadoes not use reversing entries.(Credit account titles are automatically indented when the amount is entered.Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25.)

Date

Account Titles and Explanation

Debit

Credit

12/31/20

enter an account title to record depreciation expense

enter a debit amount

enter a credit amount

enter an account title to record depreciation expense

enter a debit amount

enter a credit amount

(To record depreciation expense.)

12/31/20

enter an account title to record interest

enter a debit amount

enter a credit amount

enter an account title to record interest

enter a debit amount

enter a credit amount

(To record interest.)

1/1/21

enter an account title to record lease payment

enter a debit amount

enter a credit amount

enter an account title to record lease payment

enter a debit amount

enter a credit amount

enter an account title to record lease payment

enter a debit amount

enter a credit amount

(To record lease payment.)12/31/21

enter an account title to record depreciation expense

enter a debit amount

enter a credit amount

enter an account title to record depreciation expense

enter a debit amount

enter a credit amount

(To record depreciation expense.)

12/31/21

enter an account title to record interest

enter a debit amount

enter a credit amount

enter an account title to record interest

enter a debit amount

enter a credit amount

(To record inter