10.3 Accounting by lessee LO3 On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130000 to manufacture and had a fair value of $154109 on 1 July 2019. The lease agreement contained the following provisions Lease termm Annual rental payment, in advance on 1 July each year Residual value at end of the lease term Residual guaranteed by lessee Interest rate implicit in lease The lease is cancellable only with the permission of the lessor. 4 years $41500 $15000 nil 8% The expected useful life of the machine is 6 years. True Ltd intends to return the machine to Grit Ltd at the end of the lease term. Included in the annual rental payment is an amount of $1500 to cover the costs of maintenance and insurance paid for by the lessor Required 1. Prepare the lease payments schedule for True Ltd (show all workings). 2. Prepare the journal entries in the books of True Ltd for the year ended 30 June 2020