Sandhill Mining Corporation, a public company whose stock trades on the Toronto Stock Exchange, uses IFRS. The vice-president of finance has asked you, the assistant controller, to prepare the companys current accounting of a lease. The lease was signed by Sandhill on April 1, 2020, with Bertrand Ltd. for a piece of excavation equipment. The following information relates to the agreement.

1.		The term of the non-cancellable lease is 3 years, with a renewal option of one additional year at the annual rate of 120% of the initial payment. The equipment has an estimated economic life of 10 years.
2.		The assets fair value at April 1, 2020 is approximately $1.10 million.
3.		The asset will revert to Bertrand at the end of the initial term of the lease, or at the end of the renewal period should Sandhill exercise that option. The excavation equipment is expected to have a fair value of $625,000 on March 31, 2022 and $525,000 on March 31, 2023, which is not guaranteed.
4.		Sandhill assumes direct responsibility for all executory costs for the excavation equipment.
5.		The initial term of the lease agreement requires equal annual rental payments of $129,000 to Bertrand, beginning on April 1, 2020.
6.		The lessees incremental borrowing rate is 9%. Bertrands implicit rate is 8% and is known to Sandhill.
7.		Sandhill has a calendar year end.

You found out that it has always been Sandhills intention to exercise the renewal period because of the nature of the asset. Sandhills operations manager says that there is a 90% chance that the renewal period will be exercised.

Determine the amount of the liability for lease payments at the signing of the lease. places, e.g. 5,275.) Lease payments liability Use a computer spreadsheet to prepare an amortization schedule for Sandhill for the lease term including the expected lease renewal. (Round answers to 0 decimal places, e.g. 5,275.) Annual Lease Payments Sandhill Mining Corporation Lease Amortization Schedule Interest Reduction on Unpaid of Lease Liability Liability Balance of Lease Liability Date Apr. 1 2020 S S Apr. 1 2021 Apr. 1 2022 Apr. 1 2023 Prepare all of Sandhill's journal entries for fiscal years 2020 and 2021 to record the lease agreement and the lease payments. (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 o for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Credit Debit (To record inception of lease and first payment.) (To record interest.) (To record depreciation expense.) (To record lease payment.) (To record interest.) (To record depreciation expense.) Provide Sandhill's SFP disclosure for all of the amounts that would appear concerning the lease at December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) Sandhill Mining Corporation Statement of Financial Position - Partial Liabilities Provide Sandhill's statement of income disclosure for the fiscal year ended December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) Sandhill Mining Corporation Income Statement Right-to-Use Asset Determine the amount of the liability for lease payments at the signing of the lease. places, e.g. 5,275.) Lease payments liability Use a computer spreadsheet to prepare an amortization schedule for Sandhill for the lease term including the expected lease renewal. (Round answers to 0 decimal places, e.g. 5,275.) Annual Lease Payments Sandhill Mining Corporation Lease Amortization Schedule Interest Reduction on Unpaid of Lease Liability Liability Balance of Lease Liability Date Apr. 1 2020 S S Apr. 1 2021 Apr. 1 2022 Apr. 1 2023 Prepare all of Sandhill's journal entries for fiscal years 2020 and 2021 to record the lease agreement and the lease payments. (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 o for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Credit Debit (To record inception of lease and first payment.) (To record interest.) (To record depreciation expense.) (To record lease payment.) (To record interest.) (To record depreciation expense.) Provide Sandhill's SFP disclosure for all of the amounts that would appear concerning the lease at December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) Sandhill Mining Corporation Statement of Financial Position - Partial Liabilities Provide Sandhill's statement of income disclosure for the fiscal year ended December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.) Sandhill Mining Corporation Income Statement Right-to-Use Asset