On January 1, 2023, Carla Vista Corp, which uses IFRS, signs a 10-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 $81,970 beginning on January 1,2023 . 2. The lathe's fair value on January 1,2023 , is $500,000. 3. The lathe has an estimated economic life of 12 years, with an unguaranteed residual value of $13,000. Carla Vista 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 is 12% per year. The lessor's implicit rate is not known by Carla Vista. 6. The yearly rental payment includes $2,959.21 of 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 OF 1. Assume that Carla Vista's fiscal year end is May 31. Prepare the journl entries on Carla Vista's books to reflect the signing of the lease agreement and to record payments and expenses related to this lease for the calendar years 2023 and 2024 . Carla Vista does not prepare reversing entries. (List all debit entries before credit entries. Credit account titles ore automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the occount titles and enter ofor the amounts. Record journal entries in the order presented in the problem. Round factor values to 5 decimal places, es. 1.25124 and final answers to 2 decimal places, es. 52.75 .1 Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUF OF 1. Assume that Carla Vista's fiscal year end is May 31. Prepare the journal entries on Carla Vista's books to reflect the signing of the lease agreement and to record payments and expenses related to this lease for the calendar years 2023 and 2024, Carla Vista does not prepare reversing entries. (Ust all deblt entries before credlt entries. Credit account titles are outomaticolly indented when the amount is entered. Do not indent manually. If no entry Is required, select "No Entry" for the account titles and enter Ofor the amounts Record joumal entries in the order presented in the problem. Round factor values to 5 decimal ploces, es 1.25124 and final answers to 2 decimal places, es. 5275.) (To record depreciation expense) (Terecord exolred insuranca) (To record depreciation expense) (To record interest])
