On July 1, 2023, Blossom Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease a equipment from Wildhorse Ltd. The following information concerns the lease agreement. 1. The equipment's fair value on July 1, 2023 is $265,000. 2. The agreement requires equal rental payments of $56,500.00 beginning on July 1, 2023. 3. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $81,900. Blossom Corp. depreciates similar equipment using the straight-line method, with no residual value. 4. The lease is non-renewable. At the termination of the lease, the equipment reverts to Wildhorse. 5. Blossom's incremental borrowing rate is 7% per year. The lessor's implicit rate is not known by Blossom Corp. 6. The yearly rental payment includes $3,248.57 of executory costs related to insurance on the equipment. Date Account Titles and Explanation Debit Dec. 31, 2023 Equipment under Lease Dec. 31, 2023 Dec. 31, 2023 Lease Liability (To record insurance expense) Depreciation Expense Accumulated Depreciation - Leased Equipment (To record depreciation) Interest Expense Interest Payable 265000 Credit 265000 June 30, 2024 Insurance Expense July 1, 2024 Cash Interest Expense Lease Liability Insurance Expense Cash Dec. 31, 2024 Insurance Expense Dec. 31, 2024 Dec 31 2024 Cash (To record insurance expense) Depreciation Expense Accumulated Depreciation - Leased Equipment (To record depreciation) Interest Expense Dec. 31, 2024 Dec. 31, 2024 Dec. 31, 2024 Insurance Expense Cash (To record insurance expense) Depreciation Expense Accumulated Depreciation - Leased Equipment (To record depreciation) Interest Expense Interest Payable (To record interest) 10000