a 2017 Gisborne Ltd lease a vehicle to Tauranga Ltd. Gisborne Ltd had purchased the vehicle for its fair value of $89,721. The lease agreement contained the following: 4 years -ment, payable in advance on 30 June each year $23,900 ife of the vehicle 6 years residual value at end of lease term $15,000 alue guaranteed by lessee $7,500 ing information relates to the lease: d in the annual payment is an amount of $1,900 to cover reimbursement of insurance and nance costs paid by the lessor (i.e. executory costs). ectors of Tauranga Ltd have indicated that they intend to return the asset to Gisborne Ltd at of the lease term. esent Value (PV) of lease payments has been calculated to be $85,457. erest rate implicit in the lease is 7%. schedule summarising the lease payments to be made over the term of the lease