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Cullumber Corp., which uses IFRS, signs non$-$renewable, non$-$cancellable lease agreement to lease robotic equipment

from Blossom Inc. The following information concerns the lease agreement.

Inception date

Lease term

Fair value of equipment Jan. $1,2023$

Economic life of leased equipment

Annual rental payments starting Jan. $1,2023$

Option to purchase at the end of the term

Depreciation method

Residual value

Cullumber's incremental borrowing rate

January $1,2023$

$5$ years

$$340,000$

$7$ years

$$57,871$

none

Straight$-$line

none

$6\%$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.

$($a$)$

Using $(1)$ factor tables, $(2)$ a financial calculator, or $(3)$ Excel functions, calculate the amount of the right$-$of$-$use

asset and lease liability. $($Round factor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers to $0$

decimal places, e$.$g$.5,275.)$

The amount of the right$-$of$-$use asset $

Prepare the initial entry to reflect the signing of the lease agreement. $($List all debit entries before credit

entries. 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.$)$

Date Account Titles and Explanation

Debit

Credit

Jan.

$1,$

$2023$

Answer & Explanation Solved by verified expert

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