BEAR Ltd have leased a new van from Hyundai at Robina at a cost of $55,000 on the 1 July 2022. This new van will be used to move inventory from the various warehouses on the Gold Coast. The lease payments required by BEAR Ltd to pay each year are $20,500. Additional costs incurred by BEAR Ltd to get the van up and running for BEAR Ltd to use included the BEAR Ltd logo on the side panels and back of the van as well as install a solar system including solar panels, deep cell battery and solar regulator. The cost incurred was $9,500. The implicit interest rate on the lease is 9%. BEAR plans on keeping the van at the end of the lease term of 5 years, this has not been agreed upon as yet with Hyundai Robina. Hyundai Robina believes that the useful life of the leased asset to be 8 years. (Ensure that you show all your workings and appropriate referencing when required).

a) Record the relevant journal entries for BEAR Ltd for the 2023 financial year.

b) What is the closing lease liability as at 30 June 2023?

c) If Hyundai Robina has the right to enforce BEAR to acquire a new van at any point within the 5 years contract, by demonstrating that any alterations (e.g. solar system) made by BEAR are not reversible or changed the original characteristics and purposes of use of the van, would BEAR be able to record the vans as a lease asset? Support your discussion applying the appropriate accounting standards.