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 $27,100 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 $160,000 cash. Equivalent financing for the machine could have been obtained from Pharoahs bank at 10%. Pharoahs fiscal year coincides with the calendar year. Pharoah uses straight-line depreciation for its conveyor machines. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.

Calculate the PV of the minimum lease payments using (1) a financial calculator or (2) Excel functions. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 1,452.)

Present value of the minimum lease payments

$Enter your answer in accordance to the question statement

eTextbook and Media

List of Accounts

Prepare an amortization schedule for the term of the lease to be used by Pharoah Ltd. (Hint: You may find the ROUND formula helpful for rounding in Excel.) (Round answers to 0 decimal places, e.g. 1,452.)

Pharoah Ltd. Lease Amortization Schedule (Lessee)
Date		Annual Lease Payments		Interest on Unpaid Liability		Reduction of Lease Liability		Balance of Lease Liability
		n/a		n/a		n/a		$
Jan. 1, 2021		$		n/a		$
Jan. 1, 2022
Jan. 1, 2023
Jan. 1, 2024
Jan. 1, 2025
Jan. 1, 2026
Jan. 1, 2027
Jan. 1, 2028
		$		$		$

eTextbook and Media

List of Accounts

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.)

Date	Account Titles and Explanation	Debit	Credit
1/1/2112/31/211/1/2212/31/22
	(To record inception and payment of lease.)
1/1/2112/31/211/1/2212/31/22
	(To record depreciation expense.)
1/1/2112/31/211/1/2212/31/22
	(To record interest.)
1/1/2112/31/211/1/2212/31/22
	(To record lease payment.)
1/1/2112/31/211/1/2212/31/22
	(To record depreciation expense.)
1/1/2112/31/211/1/2212/31/22
	(To record interest.)

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.

Pharoah Ltd.

Statement of Financial Position(partial)

Title 2022 2021