On January 1, 2021, Pharoah Ltd., which uses IFRS 16, entered into an eight-year lease agreement for a conveyor machine. Annual lease payments are $34,200 at the beginning of each lease year, which ends December 31, and Pharoah made the first payment on January 1, 2021. At the end of the lease, the machine will revert to the lessor. However, conveyor machines are expected to last for only eight years and have no residual value. At the time of the lease agreement, conveyor machines could be purchased for $196,000 cash. Equivalent financing for the machine could have been obtained from Pharoahs bank at 11%. Pharoahs fiscal year coincides with the calendar year. Pharoah uses straight-line depreciation for its conveyor machines.

Prepare the journal entries on Pharoah Ltd.s books to (1) reflect the signing of the lease agreement, (2) record the payments and expenses related to this lease for the years 2021 and 2022, and (3) make any adjusting journal entries at its fiscal year ends of December 31, 2021 and 2022. Pharoah does not use reversing entries. (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 answers to 0 decimal places, e.g. 5,275.)

Prepare a partial comparative statement of financial position at December 31, 2022, and 2021, for all of the accounts related to this lease for Pharoah Ltd. Be specific about the classifications that should be used.

Date Account Titles and Explanation Debit Debit Credit 1/1/21 Equipment under Lease Cash Lease Liability (To record inception and payment of lease.) 12/31/21 Depreciation Expense Accumulated Depreciation - Leased Equipment (To record depreciation expense.) 12/31/21 Interest Expense Interest Payable (To record interest.) 1/1/22 Lease Liability TIT Cash (To record lease payment.) 12/31/22 Depreciation Expense Accumulated Depreciation - Leased Equipment (To record depreciation expense.) 12/31/22 Interest Expense Interest Payable (To record interest.) Pharoah Ltd. Statement of Financial Position (partial) For the Year Ended December 31 2022 2021 Total Assets Non-Current Assets Right-of-Use Asset $ Current Liabilities Lease Liability Non-Current Liabilities Lease Liability