Swifty Corp., which uses IFRS, signs a 4-year, non-cancellable lease agreement to lease equipment from Labelle Ltd. The following information concerns the lease agreement. 1. 2. 3. The equipment's fair value on July 1, 2020 is $275,000. The agreement requires equal rental payments of $57,700 beginning on July 1, 2020. The equipment has an estimated economic life of 5 years, with an unguaranteed residual value of $77,300. Swifty Corp. depreciates similar equipment using the straight-line method, with no residual value. The lease is non-renewable. At the termination of the lease, the equipment reverts to Labelle. Swifty's incremental borrowing rate is 6% per year. The lessor's implicit rate is not known by Swifty Corp. The yearly rental payment includes $2,976.52 of executory costs related to insurance on the equipment. 4. 5. 6. Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE. Using (1) factor tables, (2) a financial calculator, or (3) Excel functions, calculate the amount of the right-of-use asset and lease liability. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.) $ The amount of the right-of-use asset Prepare the initial entry to reflect the signing of the lease agreement. (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 for the amounts.) Account Titles and Explanation Debit Credit Date July 1 2020 Right-of-Use Asset Lease Liability Lease Liability Cash Prepare the subsequent journal entries on Swifty Corp.s books to record the payments and expenses related to this lease for the years 2020 and 2021 as well as any adjusting journal entries at its fiscal year ends of December 31, 2020 and 2021. Swifty does not use reversing entries. (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 for the amounts. Round answers to 2 decimal places, e.g. 5,125.76.) Date Account Titles and Explanation Debit Credi Dec. 31, 2020 V No Entry No Entry (To record insurance expense) Amortization Expense Right-of-Use Asset (To record depreciation) Interest Expense Interest Payable (To record interest) June 30, 2021 July 1, 2021 Interest Expense Interest Payable Lease Liability Cash Dec. 31, 2021 (To record insurance expense) (To record depreciation) (To record interest)