Autumn plc enters a lease on January $1,2022$ to use machinery for its operations. The terms of the lease are as

follows:

The term of the lease is four years. The lease agreement is non$-$cancellable requiring equal rental

payments of $$25,711\mathrm{.}11$ at the beginning of each year $($annuity$-$due basis$)$

The machine had a fair value at the commencement of the lease of $$100,000,$ an estimated economic life

of five years and a guaranteed residual value of $$5,000$

The lease contains no renewal options

Autumn's incremental borrowing rate is $5\%$ per year

Autumn uses the straight line method to depreciate its machinery

The lessor sets the annual rental rate to earn a rate of return of $4\%$ per year and Autumn is aware of this

rate.

The annuity factors at $4\%$ and $5\%$ interest rates are as follows

Required:

$($a$)$Prepare the necessary journal entries for $2022$ in accordance with IFRS $16$ Leases $.(8$ marks$)$

$($b$)$ Give to advantages of leasing for Autumn plc $(2$marks$)$

$($c$)$ State two major ratios of Autumn plc that would be affected by the above lease arrangement $.(2$marks$)$

$($d$)$ Explain three differences between IFRS and US GAAP in the accounting for Leases $(3$marks$)$