4 QUESTION 2: Part II _(5 marks) On 1 May 2020, Geelong Ltd considers whether to buy a machine outright or lease the machine for four years. The market value of the machine is $8 million and in the case of leasing the machine, the present value of four years lease payments is $4 million. If Geelong Ltd decides to buy the machine directly, it will pay the full amount 3 months later. If Geelong Ltd decides to lease the machine for four years, it will pay the same amount annually (with a present value of $4 million in total). The useful life of the machine is ten years. Required: If Geelong Ltd decides to lease the machine, rather than buy it, what are the effects on the Balance Sheet and Income Statement accounts for the year ended 30 June 2020? 4 QUESTION 2: Part II _(5 marks) On 1 May 2020, Geelong Ltd considers whether to buy a machine outright or lease the machine for four years. The market value of the machine is $8 million and in the case of leasing the machine, the present value of four years lease payments is $4 million. If Geelong Ltd decides to buy the machine directly, it will pay the full amount 3 months later. If Geelong Ltd decides to lease the machine for four years, it will pay the same amount annually (with a present value of $4 million in total). The useful life of the machine is ten years. Required: If Geelong Ltd decides to lease the machine, rather than buy it, what are the effects on the Balance Sheet and Income Statement accounts for the year ended 30 June 2020