Page 1: Question 5 (19 points) 1 (19 MARKS = 26 minutes) age 2: On December 31, 2020. Kernan Corp. (KC), a publicly accountable entity entered into a 10 year lease with Ross Finance Corp. (RFC) to acquire computer hardware having a fair value of $1.200,000. KC has negotiated with RFC 3 residual value guarantee of $120,000. KC believes at a minimum, the equipment will be worth $80,000. The rate implicit in the lease required by PFC is 63 which is known to both RFC and KC. It is less than KC's incremental borrowing rate of 7. The equipment is estimated to have a useful life of 12 years and KC uses the straight line method of depreciation for computer equipment 3: Kernan Corp, has adopted IFRS 1o for the assets under lease and has made mere lease payment at the inception of the lease. REQUIRED a Provide a detailed calculation to prove that the amount of the De payment to be charged by the lessor would be 5145244 b. Prepare all journal entries for the lessee for 2 December 31, 2020 1. December 31, 2021 C Prepare all journal entries for the lessor los December 31, 2020 ii. December 31, 2021 Page 1: REQUIRED 1 nge 2: a. Provide a detailed calculation to prove that the amount of the annual lesse payment to be charged by the Lessor would be $145244 b. Prepare all journal entries for the lessee for i. December 31, 2020 ii . December 31. 2021 c. Prepare all journal entries for the lessor for: i. December 31, 2020 ii . December 31, 2021 3: Paragraph B TV - Page 1: Question 5 (19 points) 1 (19 MARKS = 26 minutes) age 2: On December 31, 2020. Kernan Corp. (KC), a publicly accountable entity entered into a 10 year lease with Ross Finance Corp. (RFC) to acquire computer hardware having a fair value of $1.200,000. KC has negotiated with RFC 3 residual value guarantee of $120,000. KC believes at a minimum, the equipment will be worth $80,000. The rate implicit in the lease required by PFC is 63 which is known to both RFC and KC. It is less than KC's incremental borrowing rate of 7. The equipment is estimated to have a useful life of 12 years and KC uses the straight line method of depreciation for computer equipment 3: Kernan Corp, has adopted IFRS 1o for the assets under lease and has made mere lease payment at the inception of the lease. REQUIRED a Provide a detailed calculation to prove that the amount of the De payment to be charged by the lessor would be 5145244 b. Prepare all journal entries for the lessee for 2 December 31, 2020 1. December 31, 2021 C Prepare all journal entries for the lessor los December 31, 2020 ii. December 31, 2021 Page 1: REQUIRED 1 nge 2: a. Provide a detailed calculation to prove that the amount of the annual lesse payment to be charged by the Lessor would be $145244 b. Prepare all journal entries for the lessee for i. December 31, 2020 ii . December 31. 2021 c. Prepare all journal entries for the lessor for: i. December 31, 2020 ii . December 31, 2021 3: Paragraph B TV