Burwood Ltd enters into a non$-$cancellable contract with Go$-$Get Ltd to use a truck for a period of three

years. The truck is explicitly specified in the contract, and Burwood Ltd decides where the truck will be

driven, what cargo will be transported and when the truck will be used. Go$-$Get Ltd has the right to replace

the truck with another truck, which is identical to the first truck, when Go$-$Get Ltd performs maintenance

on the original truck. In addition, Go$-$Get Ltd has some restrictions in the contract, specifically, that

Burwood Ltd cannot haul explosives in the truck.

Burwood Ltd pays $$35,000$ on signing the agreement on $1$ July $2023.$ The truck is expected to have an

economic life of five years, after which time it will have an expected salvage value of $$22,000.$ There is a

purchase option which Burwood Ltd is willing to exercise at the end of the lease term for $$63,000.$ If this

purchase option is exercised the truck will be transferred to Burwood Ltd$.$

There are six half$-$yearly payments of $$123,000,$ the first being made on $31$ December $2023.$ Included

within the $$123,000$ lease payments is an amount of $$20,000$ representing payment to Go$-$Get Ltd for

insurance and maintenance of the truck. The truck is to be depreciated on a straight$-$line basis. The rate

of interest implicit in the lease is $12\%$ per annum.

Present value factors: Requirements $($calculations rounded to the nearest dollar$)$:

a$)$ In accordance with AASB$16$ 'Leases', identify whether the contract between Burwood Ltd and

Go$-$Get Ltd contains a lease. Provide necessary justifications to support your answer.

Assuming the above contract contains a lease in accordance with AASB$16,$

b$)$ Calculate the lease liability and lease asset for Burwood Ltd $($show workings$)$;

c$)$ Prepare a full lease schedule for Burwood Ltd$,$ showing the division of the lease rental into

interest and principal components; and

d$)$ Provide the journal entries for the lease transactions in the books of Burwood Ltd for the

financial year ending $30$ June $2024($from $1$ July $2023$ to $30$ June $2024).$ Narrations are not

required.