Finance lease — lessor  LO3, 5 On 1 July 2019, Jane Plum decided she needed a new car. She went to the local car yard, North Ltd, run by Fred Peach. Jane discussed the price of a new Roadster Special with Fred, and they agreed on a price of $37 000. As North Ltd had acquired the vehicle from the manufacturer for $30 000, Fred was pleased with the deal. On learning that Jane wanted to lease the vehicle, Fred agreed to arrange for South Ltd, a local finance company, to set up the lease agreement. North Ltd then sold the car to South Ltd for $37 000. South Ltd wrote a lease agreement, incurring initial direct costs of $1410 as a result. The lease agreement contained the following provisions. Initial payment on 1 July 2019 $13 000 Payments on 1 July 2020 and 1 July 2021 $13 000 Guaranteed residual value at 30 June 2022 $10 000 Implicit interest rate in the lease 6% South Ltd agreed to pay for the insurance and maintenance of the vehicle, the latter to be carried out by North Ltd at regular intervals. The cost of these services is valued at $3000 p.a. The vehicle had an expected useful life of 4 years. The expected residual value of the vehicle at 30 June 2022 was $12 000. Costs of maintenance and insurance incurred by South Ltd over the years ended 30 June 2020 to 30 June 2022 were $2810, $3020 and $2750 respectively. At 30 June 2022, Jane returned the vehicle to South Ltd. Assume that the lease is classified as a finance lease by South Ltd. Required 1. Prepare the lease receipts schedule for South Ltd. 2. Prepare the journal entries in the books of South Ltd from 1 July 2019 to 30 June 2022.