[36] The journal entry prepared by WIN to record the lease contract on January 1, 2019 would be

a.

DEBIT-Right of Use Assets [$342,000]; CREDIT-Obligation Under Capital Lease [$342,000].

b.

DEBIT-Right of Use Assets [$250,079]; CREDIT-Obligation Under Capital Lease [$250,079].

c.

DEBIT-Right of Use Assets [$239,147]; CREDIT-Cash [$239,147].

d.

DEBIT-Right of Use Assets [$330,000]; CREDIT-Obligation Under Capital Lease [$330,000].

e.

DEBIT-Right of Use Assets [$239,147]; CREDIT-Obligation Under Capital Lease

[37] What would be the amount of interest expense for 2019 if the residual value was guaranteed by the lessee? [Round to the nearest dollar]

a.

$17,366.

b.

$20,799.

c.

$26,400.

d.

$16,740.

e.

$19,032.

Not Ordinary Drones (NOD), Inc., a lessor, leased a drone to Worldz Information Network, Ltd., [WIN], a lessee, on January 1, 2019. The following information relates to the leased asset and the lease agreement: Fair value of leased drone $Undisclosed Lease 10 years Useful life 15 years Payment Due January 1 Payment frequency Annual Annual Instalments starting January 1, 2019 $33,000 Estimated residual value at end of the lease, [as stated in the problem] $23,600 Interest rate implicit in the lease (unknown to the lessee] 7% Interest rate incremental to the lessee 8% Ownership of drone reverts to lessor at end of lease term Year end for both companies December 31 Amortization method Straight line Accounting standards used - NOD ASPE - WIN IFRS REQUIRED: Select the one best answer to each of the questions listed below and input it in the computer