answer sheets)

Steven Ltd (Lessor) and Shane Ltd (Lessee) enter into a lease agreement for a vehicle on 30 June 2020. Details of the lease agreement are as follows: Lease term 3 years $36,500 Annual Rental Payment in advance starting from 30 June 2020 Estimated Residual value at the end of the lease term $10,000 Residual Value guaranteed by the lessee $7,000 Interest Rate implicit in the lease 7% The annual rental payment includes $1,500 that is reimbursed to the lessor to do the maintenance and insurance for the vehicle on behalf the lessee. The lessee intends to return the vehicle to the lessor at the end of the lease term. The lease payment schedule for the lessee is shown below: Date Lease Payment Interest Liability Balance Liability Reduction Expense 30-Jun-20 103,995 30-Jun-20 35,000 - 35,000 68,995 30-Jun-21 35,000 4,830 30,170 38,824 30-Jun-22 35,000 2,718 32,282 6,542 30-Jun-23 7,000 458 6,542 0 Required: Based on the above lease payments schedule, prepare the necessary journal entries in the books of the lessee on the following dates: 1. 30 June 2020 2. 30 June 2021 3. 30 June 2023 Narrations are NOT needed. (10 Marks) JOURNAL ENTRIES IN THE BOOKS OF THE LESSEE DATE DESCRIPTION DR CR