On January 1, 2020,SheridanLtd. entered into an agreement to lease a truck fromConcordLtd. BothSheridanandConcorduse IFRS 16. The details of the agreement are as follows:

Carrying value of truck forConcordLtd.$20,008Fair value of truck$20,008Economic life of truck5 yearsLease term3 yearsRental payments (at beginning of each month)$600Executory costs included in rental payments each month for insurance$25Incremental borrowing rate forSheridanLtd.12%SheridanLtd. expects to payConcordLtd. $3,610under a residual value guarantee for the truck.

Additional information:

1.There are no abnormal risks associated with the collection of lease payments fromSheridan.2.There are no additional unreimbursable costs to be incurred byConcordin connection with the leased truck.3.At the end of the lease term,Concordsold the truck to a third party for $3,340, which was the truck's fair value at December 31, 2022.SheridanpaidConcordthe difference between the guaranteed residual value of $3,610and the proceeds obtained on the resale.4.Sheridanknows the interest rate that is implicit in the lease.5.Sheridanknows the amount of executory costs included in the minimum lease payments.6.Sheridanuses straight-line depreciation for its trucks with the residual value guarantee of $3,610for the leased truck.

Prepare the journal entries thatConcordwould make on January 1, 2020, and the adjusting journal entries at December 31, 2020, to record the annual interest income from the lease arrangement, assuming thatConcordhas a December 31 fiscal year end.