Freddy Ltd leases machinery to May Ltd on 1

January 20X1. The lease is for 4 years with an annual rental repayment of $4,000 payable annually in advance. The useful life of the asset is deemed to be 4 years and the present value of lease payments equalled the carrying amount of the asset on inception. The implicit rate of interest is 15%. Required: What will be shown on the statement of financial position and the statement of profit or loss of Freddy for the year ended 31st December 20X1?