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Pharoah Ltd., a public company following IFRS 16, recorded a right-of-use asset and lease liability at $170,400 on May 1, 2020. The interest rate is

Pharoah Ltd., a public company following IFRS 16, recorded a right-of-use asset and lease liability at $170,400 on May 1, 2020. The interest rate is 10%. Pharoah made the first lease payment of $29,037 on May 1, 2020. The lease requires a total of 8 annual payments. The equipment has a useful life of 8 years with no residual value. Assume that at December 31, 2020, Pharoah made an adjusting entry to accrue interest expense of $9,424 on the lease. Prepare Pharoahs May 1, 2021 journal entry to record the second lease payment of $29,037. Assume that no reversing entries are made.

Date

Account Titles and Explanation

Debit

Credit

May 1

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