What items and amounts will appear on wiles income statement

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On July 1, 2020, Wiles Ltd., a dealer in machinery and equipment, leased equipment to Pearson Inc. The lease is for ten years, and at the end of the lease period, title will pass to Pearson. Wiles requires ten equal annual payments of $ 62,100 on July 1 of each year, and Pearson made the first payment on July 1, 2020. Wiles had purchased the equipment for $ 390,000 on January 1, 2020, and established a selling price of $ 500,000 (which was fair value at July 1, 2020). Assume that, at July 1, 2020, the present value of the rent payments over the lease term discounted at 8% (the appropriate interest rate) was $ 450,000. The useful life of the equipment is 12 years.

Problem 1:
What items and amounts will appear on Wiles Income Statement and Balance Sheet for the year ended December 31, 2020. Wiles reports using IFRS Standards.

Reference no: EM132763281

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