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		$	21,076.11
Bargain purchase option price at end of lease term reasonably certain to be exercised by Russell		$	3,600.00
Lease term			5 years
Economic life of leased equipment			10 years
Lessors cost		$	48,000.00
Fair value of asset at July 1, 2020		$	88,600.00
Lessors implicit rate			11%
Lessees incremental borrowing rate			11%

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.

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. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 52.75.)

Date	Account Titles and Explanation	Debit	Credit
7/1/20
	(To record inception and payment of lease.)
12/31/20
	(To record interest.)
12/31/20
	(To record depreciation expense.)
7/1/2021
	(To record lease payment.)
12/31/2021
	(To record interest.)
12/31/2021
	(To record depreciation expense.)