The following facts are for a non-cancellable lease agreement between Cullumber Corporation and Russell Corporation, a lessee:

Inception date		July 1, 2020
Annual lease payment due at the beginning of each year, starting July 1, 2020		$	20,239.62
Bargain purchase option price at end of lease term reasonably certain to be exercised by Russell		$	4,600.00
Lease term			5 years
Economic life of leased equipment			10 years
Lessors cost		$	53,000.00
Fair value of asset at July 1, 2020		$	88,800.00
Lessors implicit rate			9%
Lessees incremental borrowing rate			9%

The collectibility of the lease payments is reasonably predictable, and there are no important uncertainties about costs that have not yet been incurred by the lessor. The lessee assumes responsibility for all executory costs. Both Russell and Cullumber use IFRS 16.

QUESTIONS:

A) Calculate the amount of gross investment at the inception of the lease for Cullumber Corporation, the lessor.

Gross investment

$Enter your answer in accordance to the question statement

B) Calculate the amount of net investment at the inception of the lease for Cullumber Corporation, the lessor.

Net investment

$Enter your answer in accordance to the question statement

C) Prepare a lease amortization schedule using a computer spreadsheet for Cullumber Corporation for the five-year lease term.

Cullumber Leasing Corporation (Lessor) Lease Amortization Schedule
Date		Annual Lease Payment Plus PO		Interest on Net Investment		Net Investment Recovery		Balance of Net Investment
7/1/20								$
7/1/20		$				$
7/1/21				$
7/1/22
7/1/23
7/1/24
6/30/24
		$		$		$

D) Prepare the journal entries to reflect the signing of the lease and to record the receipts and income related to this lease for the years 2020, 2021, and 2022. The lessors accounting period ends on December 31, and Cullumber Corporation does not use reversing entries.