Wing Corporation enters into a lease with Sharda Inc, a lessor, on August 15, 2011, that does not transfer ownership or contain a bargain purchase option. Both Wing and Sharda use IFRS. The lease covers three years of the equipment’s eight-year useful life, and the present value of the minimum lease payments is less than 90% of the equipment’s fair market value. Prepare Wing’s journal entry to record its August 15, 2011 annual lease payment of $31,500.
Wing has a November 30 year end.