Question 1: Lessee Accounting (12 marks) New Age Transportation Inc. entered into a non-cancellable lease agreement...

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Question 1: Lessee Accounting (12 marks) New Age Transportation Inc. entered into a non-cancellable lease agreement with All Seasons Automotive Company for the lease of a new semi-tractor on January 1, 2021. The agreement indicates that New Age can purchase the truck at the end of the lease term for a specified price. Other details pertaining to the lease follow: Price at which New Age can purchase the truck at the end of the lease term Annual lease payment, due at the beginning of each year (including executory costs) Annual executory costs Estimated fair value of leased asset at end of lease term Estimated fair value of leased asset at the end of asset's economic life Fair value of the truck at the inception of the lease SSSSss 14,400 $ 49,257 2,172 24,000 $ 2,000 221,000 Estimated useful life of the semi-tractor (in years) 10 Lease term (in years) 5 Interest rate implicit in the lease (this rate is known to New Age) 6% New Age Transportation's incremental borrowing rate 5% The executory costs included in the annual lease payment are for repairs and maintenance to the leased asset. New Age follows IFRS, and uses the straight-line method to depreciate all semi-tractors. Required: 1. Calculate the present value of the minimum lease payments from the perspective of New Age Transportation Inc. (2 marks) 2. What type of lease is this from the perspective of New Age Transportation Inc.? Why? (2 marks) 3. Prepare an amortization schedule that includes the first 3 lease payments. (1.5 marks) 4. Prepare all journal entries that New Age Transportation Inc. would record for the lease on each of the following dates: January 1, 2021 (2 marks) December 31, 2021 (3 marks) January 1, 2022 (1.5 marks) Question 1: Lessee Accounting (12 marks) New Age Transportation Inc. entered into a non-cancellable lease agreement with All Seasons Automotive Company for the lease of a new semi-tractor on January 1, 2021. The agreement indicates that New Age can purchase the truck at the end of the lease term for a specified price. Other details pertaining to the lease follow: Price at which New Age can purchase the truck at the end of the lease term Annual lease payment, due at the beginning of each year (including executory costs) Annual executory costs Estimated fair value of leased asset at end of lease term Estimated fair value of leased asset at the end of asset's economic life Fair value of the truck at the inception of the lease SSSSss 14,400 $ 49,257 2,172 24,000 $ 2,000 221,000 Estimated useful life of the semi-tractor (in years) 10 Lease term (in years) 5 Interest rate implicit in the lease (this rate is known to New Age) 6% New Age Transportation's incremental borrowing rate 5% The executory costs included in the annual lease payment are for repairs and maintenance to the leased asset. New Age follows IFRS, and uses the straight-line method to depreciate all semi-tractors. Required: 1. Calculate the present value of the minimum lease payments from the perspective of New Age Transportation Inc. (2 marks) 2. What type of lease is this from the perspective of New Age Transportation Inc.? Why? (2 marks) 3. Prepare an amortization schedule that includes the first 3 lease payments. (1.5 marks) 4. Prepare all journal entries that New Age Transportation Inc. would record for the lease on each of the following dates: January 1, 2021 (2 marks) December 31, 2021 (3 marks) January 1, 2022 (1.5 marks)