A 3-year lease is initiated on January 1, 2017 for equipment with an expected useful life of 6 years. The Lessor is Supreme Asset Management Company (SAMC) and the lessee is Bogue Distributors Limited (BDL). The equipment reverts to SAMC upon expiration of the lease agreement. Three Payments are due to SAMC in the amount of $180,000 per year beginning December 31,2017. An additional sum of $12,000 is to be paid annually by BDL for insurance. BDL guarantees a $20,000 residual value on December 31,2019 to SAMC. The leased asset is expected to also have a \$20,000 salvage value on December 31,2019 ; therefore, the asset should be depreciated down to the $20,000 expected residual value. The lessee's incremental borrowing rate is 14% (and the lessor's implicit rate is 12%). Required: a) Differentiate between the lessee's incremental borrowing rate and the lessor's implicit b) Record all the journal entries in the books of the BDL over the life of the 4 marks) by the relevant calculations). (12 marks) I. IAS 12 Income Taxes details the requirements relating to the accounting treatment of deferred tax. Explain why it is considered necessary to provide for deferred tax and briefly outline the principles of accounting for deferred tax contained in LAS 12 Income Taxes. (6 marks) II. Winston Samuels is an accounting major at the University of Technology, Jamaica. He is completing a project relating to the Regulatory Framework for Financial Reporting. Winston has been reading about the regulatory framework but is uncertain of the differences between the principles- based the and rules-based accounting systems. REQUIRED