Walla Corporation, which uses ASPE, enters into a six-year lease of equipment on September 1, 2023, that requires annual payments beginning September 1, 2023. In addition, Walla guarantees the lessor a residual value at lease end.
		Amount of annual lease payments			$ 28,000
		Guaranteed residual value			17,000
		Lease term in years			6
		Useful life of equipment in years			7
		Interest rate			9%
a.	Using Excel function, calculate the amount of the capital lease and prepare Wallas September 1, 2023 journal entry.
	Present value of lease payments
				Debit		Credit
	Equipment Under Lease
			Obligations Under Lease
			Cash
b.	Assume instead that Walls follows IFRS and that the amount expected to be paid under the residual value guarantee is changed as shown here.
			New guaranteed residual value	$ 10,000
	Calculate the amount of the right-of-use asset and prepare Wallas September 2023 journal entries.
	Present value of lease payments
				Debit		Credit