1. Prepare the necessary journal entries for the lease arrangement at 30 June 2021 in the records of Dee Ltd. (13 marks)

2. Calculate the lease receivable that Mark Ltd will recognise on 30 June 2020. (2 marks)

Dee Ltd leased equipment from Mark Ltd on 30 June 2020. The equipment is in the records of Mark Ltd at its fair value of $177,162 on 30 June 2020. Mark Ltd incurred $2,280 in costs to prepare and execute the lease document. The lease agreement contained the following details: Lease term 4 years Economic life of the equipment 5 years $46,000 Annual rental payments, in advance (commencing 30/06/20) $30,000 Residual value of the equipment at the end of the lease term $20,000 Residual value of the equipment guaranteed by Dee Ltd Interest rate implicit in the lease 8% PV of $1 in 4 years at 8% 0.7350 PV of $1 annuity at 8% with 3 payments 2.5771 PV of $1 annuity at 8% with 4 payments 3.3121 The annual payments of $46,000 include $2,000 to reimburse Mark Ltd for maintenance and insurance costs that will need paid by Mark Ltd. Dee Ltd incurred $1,658 in costs to negotiate the lease agreement. The equipment will be returned to Mark Ltd at the end of the lease term. Dee Ltd and Mark Ltd have a reporting period ending 30 June. Nomiradi