The following facts are for a non-cancellable lease agreement between Sunland 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		$	20,286.43
Bargain purchase option price at end of lease term reasonably certain to be exercised by Russell		$	4,000.00
Lease term			5 years
Economic life of leased equipment			10 years
Lessors cost		$	55,200.00
Fair value of asset at July 1, 2020		$	90,200.00
Lessors implicit rate			8%
Lessees incremental borrowing rate			8%

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 Sunland use IFRS 16.

QUESTIONS:

A) Calculate the amount of the right-of-use asset and lease liability.

B) Prepare a lease amortization schedule for the lease obligation using a computer spreadsheet for Russell Corporation for the five-year lease term.

C) Prepare the journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2020 and 2021. Russells annual accounting period ends on December 31, and Russell does not use reversing entries.

Need a journal entry for:

(To record inception and payment of lease.)

(To record interest.)

(To record depreciation expense.)

(To record lease payment.)

(To record interest.)

(To record depreciation expense.)