Exercise 10.3 Accounting by lessce On 1 July 2019, True Ltd leased a plastic-moulding machine from Grit Ltd. The machine cost Grit Ltd $130 000 to manufacture and had a fair value of $154 109 on 1 July 2019. The lease agreement contained the following provisions. 4 years $41500 $15000 Lease term Annual rental payment, in advance on 1 July each year Residual value at end of the lease term Residual guaranteed by lessee Interest rate implicit in lease The lease is cancellable only with the permission of the lessor. nil 8% The expected useful life of the machine is 6 years. True Ltd intends to return the machine to the Grit Ltd at the end of the lease term. Included in the annual rental payment is an amount of $1500 to cover the costs of maintenance and insurance paid for by the lessor. - Required 1. Prepare the lease payments schedule for the True Ltd (show all workings) (2 marks) 2. What is the amount of the right-to-use asset that the company needs to record on 1 July 2019? (1 mark) 3. What is the amount of interest expense that the needs to record on 30 June 2020? (1 mark) 4. What journal entry/entries is the accountant required to post on 30 June 2020? (2 marks)