Accounting by lessee Max Ltd prepares the following lease payments schedule for the lease of a machine from Payne Ltd The machine has an economic life of 6 years. The lease agreement requires four annual payments of $33 000 (in arrears), and the machine will be returned to Payne Ltd at the end of the lease tem. MAX LTD Lease payments schedule Lease Interest Reduction in Balance liability of liability expense (10%) payments 1 July 2018 1 July 2019 1 July 2020 1 July 2021 1 July 2022 $98512 30000 9851 7836 $20 149 22 164 24 380 31 819 78363 30000 56 199 30000 35000 5620 31819 3181 $125000 $26488 $98512 S2 2019 short answer question format (examples) answer the following questions: Based on the above schedule, please What is the amount of the annual lease payment? (0.2 marks) Is any of the residual value guaranteed by the lessee? If so, how much? (0.2 marks) What is the amount of the right-to-use asset that the lessce will recognise on the commencement of the lease? Please show all of your workings. (0.6 marks) How much depreciation expense should the lessce record cach year? (1 mark: 0.2 marks for the correct answer, 0.8 marks for your workings) On 1 July 2020, the company will need to make the second lease payment. What is the correct journal entry needed to record the payment? (1 mark) On 1 July 2022, the company needs to write off the right-to-use asset. What is the correct journal entry needed to record the derecognition of the right-to-use asset? (1 mark) 1. 2. 3. 4. 5. 6