Vaughn Inc. leased a new crane to Marigold Construction Inc. under a six-year, non-cancellable contract starting February 1, 2020. The lease terms require payments of $20,600 each February 1, starting February 1, 2020. Vaughn will pay insurance and repair and maintenance charges on the crane, which has an estimated life of 12 years, a fair value of $160,000, and a cost to Vaughn of $160,000. The cranes estimated fair value is $50,000 at the end of the lease term. No bargain purchase or renewal options are included in the contract. Both Vaughn and Marigold have calendar year ends and use IFRS 16. Collectibility of the lease payments is reasonably certain and there are no uncertainties about unreimbursable lessor costs. Marigolds incremental borrowing rate is 8% and Vaughn implicit interest rate of 7% is known to Marigold.

Prepare all the entries related to the lease contract and leased asset for the year 2020 for the lessee and lessor, assuming the following executory costs: insurance of $420 covering the period February 1, 2020, to January 31, 2021 and a one-year maintenance contract beginning February 1, 2020 costing $1,700. Straight-line depreciation is used for similar leased assets. The crane is expected to have a residual value of $21,000 at the end of its useful life. (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 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Lessees Entries

Date	Account Titles and Explanation	Debit	Credit
February 1, 2020December 31, 2020
	(To record inception of lease and first lease payment.)
February 1, 2020December 31, 2020
	(To record interest.)
February 1, 2020December 31, 2020
	(To record depreciation expense.)

Lessors Entries

Date	Account Titles and Explanation	Debit	Credit
Feb. 1, 2020Dec. 31, 2020
	(Collection of rent.)
Feb. 1, 2020Dec. 31, 2020
	(To record prepayments.)
Dec. 31, 2020Feb. 1, 2020
	(To record rent revenue.)
Feb. 1, 2020Dec. 31, 2020
	(To record expired prepayments.)
Dec. 31, 2020Feb. 1, 2020
	(To record depreciation expense.)