Question

Brief Exercise 20-9 Ivanhoe Ltd., a public company following IFRS 16, recorded a right-of-use asset and lease liability at $159,600 on May 1, 2020. The interest rate is 12%. Ivanhoe made the first lease payment of $31,224 on May 1, 2020. The lease requires a total of 7 annual payments. The equipment has a useful life of 7 years with no residual value. Assume that at December 31, 2020, Ivanhoe made an adjusting entry to accrue interest expense of $10,270 on the lease. Prepare Ivanhoe’s May 1, 2021 journal entry to record the second lease payment of $31,224. Assume that no reversing entries are made. (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.)

There are THREE (3) lines to the journal entry.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

May 1 ,2021

Lease payable Dr. 15819

Interest expenses Dr. 5135

Interest payable Dr. 10270

To cash 31224

( being record second lease payment)