a. You have recently started an internship at an investment fund. Currently, the Warehouse accounts for leases using NZ IAS 17, as opposed to the new lease standard NZ IFRS 16. Accordingly, they have disclosed the information below for operating leases (i.e. leases that are not capitalised), which are all for retail buildings. The Warehouse has also recently issued bonds that pay 5.30% interest, but has older bonds that pay 6.0% interest.

Your supervisor has asked you to consider the effect of NZ IFRS 16 on the Warehouses financial statements and thus valuation, by capitalising the operating leases. To do so, first fill in the lease template below. You will need to calculate the opening lease liability as the present value of minimum lease payments. (Hint: You can modify the excel template for the lecture example to calculate this). Remember to justify your choices made for your answer (8 Marks)

Year	Lease Payment	Lease Liab	Interest Part	Principal Part

b. Record the journal entries relating to the lease in 2019 (i.e. Year 1) not including the issuance of the lease. The Warehouse depreciates buildings over a 50 year life. (6 Marks)

Account	Debit	Credit

Account	Debit	Credit

Type in any workings to the journal entries here

Type in any workings to the table here

operating leases The group's non, cancellable operating leases mainly relate to building occupancy leases and typically expires in ten years. The leases have various varying terms, escolation. causes and renewal rights. On renewal, the terms of the leases are renegotiated. Commitments for minimum lease payments in relation to non cancelable operating leases at balance date are as follows a Future minimum rental payment 2019 2018 o1 years 000 000 Osant your formowano 0 - 1 year 127342 121473 1-2 year - 108034 10751 2-5 year 230375 249550 5+ years 185957 661508 712761 1234287 operating leases The group's non, cancellable operating leases mainly relate to building occupancy leases and typically expires in ten years. The leases have various varying terms, escolation. causes and renewal rights. On renewal, the terms of the leases are renegotiated. Commitments for minimum lease payments in relation to non cancelable operating leases at balance date are as follows a Future minimum rental payment 2019 2018 o1 years 000 000 Osant your formowano 0 - 1 year 127342 121473 1-2 year - 108034 10751 2-5 year 230375 249550 5+ years 185957 661508 712761 1234287