1.Nichols Ltd manufactures specialised machinery for both sale and lease. On 1 July

2021, Nichols leased a machine to Pontine Ltd. The costs incurred by Nichols to set up the lease agreement were $1690. The machine cost Nichols Ltd $210 000 to manufacture, and its fair value at the inception of the lease was $232 890. The interest rate implicit in the lease is 10%, which is in line with current market rates. Under the terms of the lease, Pontine Ltd has guaranteed $22 000 of the asset's expected residual value of $40 000 at the end of the 5-year lease term. Pontine Ltd agreed to pay an annual lease payment of $55 000 with the first payment due at the end of the first year. The debit to the sales revenue account in Nichols' books is: