Waterway Inc. leased a new crane to Concord Construction Inc. under a six-year, non-cancellable contract starting February 1,2020. The lease terms require payments of $21,400 each February 1, starting February 1, 2020. Waterway 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 Waterway of $160,000. The crane's 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 Waterway and Concord 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. Concord's incremental borrowing rate is B\% and Waterway' implicit interest rate of 7% is known to Concord. Prepare all the entries related to the lease contract and leased asset for the year 2020 for the lessee and Ifrssor, assumitis the following executory costs: insurance of $480 covering the period February 1, 2020, to January 31, 2021 and a one-vear maintenance contract beginning February 1. 2020 costing \$1, 190. Straighit-line depreciation is wsed for similar leased assets. The crane is expected to have a residual value of $20,000 at the end of its useful life. (Credit account titles are autumatically indented when the amount is entered. Do not indent munually. If no entry is required, select +No Fntry for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Lessee's Entries Date Account Tities and Explanation (To record inception of lease and first lease parment) (To record interest) [To record depreciation exiecise] Lessoris Entries (To record prepwyments) (To record rent revernie.) [To record expired prepaymenti] (To record depresiation espanse.) Waterway Inc. leased a new crane to Concord Construction Inc. under a six-year, non-cancellable contract starting February 1,2020. The lease terms require payments of $21,400 each February 1, starting February 1, 2020. Waterway 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 Waterway of $160,000. The crane's 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 Waterway and Concord 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. Concord's incremental borrowing rate is B\% and Waterway' implicit interest rate of 7% is known to Concord. Prepare all the entries related to the lease contract and leased asset for the year 2020 for the lessee and Ifrssor, assumitis the following executory costs: insurance of $480 covering the period February 1, 2020, to January 31, 2021 and a one-vear maintenance contract beginning February 1. 2020 costing \$1, 190. Straighit-line depreciation is wsed for similar leased assets. The crane is expected to have a residual value of $20,000 at the end of its useful life. (Credit account titles are autumatically indented when the amount is entered. Do not indent munually. If no entry is required, select +No Fntry for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Lessee's Entries Date Account Tities and Explanation (To record inception of lease and first lease parment) (To record interest) [To record depreciation exiecise] Lessoris Entries (To record prepwyments) (To record rent revernie.) [To record expired prepaymenti] (To record depresiation espanse.)
