FINANCE LEASE LESSEE (INCLUDING DISCLOSURES) Dunedin Ltd decided to lease from Rotorua Ltd a motor vehicle that had a fair value at 30 June 2014 of $38 960. The lease agreement contained the following provisions: Lease term (non-cancellable) 3 years Annual rental payments (commencing 30/6/14) $11 200 Guaranteed residual value (expected fair value at end of lease term) $12 000 Extra rental per annum if the car is used outside the metropolitan area $1 000 The expected useful life of the vehicle is 5 years. At the end of the 3-year lease term, the car was returned to the lessor, which sold it for $10 000. The annual rental payments include an amount of $1200 to cover the cost of maintenance and insurance arranged and paid for by the lessor. The car was used outside the metropolitan area in the 2015-16 year. The lease is considered to be a finance lease. Required 1. Prepare the journal entries for Dunedin Ltd from 30 June 2014 to 30 June 2017. 2. Prepare the relevant disclosures required under IAS 17 for the years ending 30 June 2012 and 30 June 2016. 3. How would your answer to requirement 1 change if the guaranteed residual value was only $10 000, and the expected fair value at the end of the lease term was $12 000