DJI Inc. manufactures equipment that is sold or leased. On 31 December 2018 DJI leased equipment to Space Ltd. for a non-cancelable lease term of five years ending 31 December 2023 at which time possession of leased asset will revert to DJI Inc. The equipment cost $220,000 to manufacture and has an expected useful life of five years. Its normal sales price (fair value) is $272,338. The residual value was guaranteed by Space Ltd. for $20,000 at the end of the lease term. Space Ltd. estimated the fair value of the equipment at the end of the lease term will be around $10.000. Under the lease, five equal annual payments of $ 60,000 are due on December 31 of each year. The first payment was made on 31 December 2018. Space Ltd.'s incremental borrowing rate is 10%. Space does not know DJI's implicit interest rate is 8%. Both companies use straight-line depreciation and have the fiscal year ended on 31 December of each year. Required: 1. Show how DJI Ltd. calculated the $60,000 annual lease payments. (4 marks) 2. Show how Space calculates its lease liability. (3 marks) 3. The following is the payment schedule for Space. Fill in the missing information on 31 December 2020 and 31 December 2023 (last row). Round the number to the nearest 10 for the entry on 31 December 2023 (1.e. If the number you are rounding is followed by 5. 6. 7. 8. or 9. round the number up. 38 would be rounded to 40. If the number you are rounding is followed by 0.1.2.3.4. round the number down. 33 would be rounded to 30.). (8 marks) Date Periodic payment Interest Expense in Reduction Liability Lease Carrying amount of lease liability 256.403 196,403 156,043 60,000 60,000 60,000 40.360 19.640 31.12.2018 31.12.2018 31.12.2019 31.12.2020 31.12.2021 | 31.12.2022 31.12.2023 60.000 60.000 11.165 6,281 48.835 53.719 62.812 9.093 4. Prepare the appropriate entries for Space on 31 December 2013 & 2019. Indicate the date for each entry. Narratives for journal entries are not required. (6 marks) 5. Prepare the appropriate entries for DJI Ltd. on 31 December 2013 & 2019. Narratives for journal entries are not required