Northwind Logistics leases a forklift on 1 January 2025 for five years.
- The present value of the lease payments not yet paid is $84,000.
- A payment of $6,000 was made in cash on the commencement date.
- There are no initial direct costs, incentives or restoration obligations.
Required: Prepare the journal entry to recognise the lease on 1 January 2025.
Remember: the lease liability is only the payments still outstanding. A payment made at commencement is not part of the liability, but it does form part of the right-of-use asset.