Box Ltd (lessee) entered into a lease with GEC Ltd (lessor) to obtain the services of a forklift truck. The term of the lease is four years and, in return, Box Ltd has agreed to make an initial payment of $4000 followed by 47 monthly payments of $2000. The rate of interest charged by the lessor is found to be 1% per month, and the lessor acquired the forklift truck for $78 707. GEC Ltd classifies the lease as a finance lease. 

Required 

(a) Record the lease of the forklift truck, including the initial payment of $4000 and the first lease installment of $2000, in the books of the lessor. 

1. (b) Record the lease of the forklift truck, including the initial payment of $4000 and the first lease installment of $2000, in the books of the lessee.