Glen Coach Tours Limited entered into a contract with Globe Bus Manufacturers Limited for the lease of two buses. The model and size of buses are stated in the contract and Globe Bus Manufacturers does not have substitution rights. The commencement date of the lease is 1 July 2020 and the duration of the lease is five years. It is non-cancellable. Five lease payments of R135 000 are to be made annually, in arrears, the first being made on 30 June 2021. The lease agreement gives the lessee the option to purchase the buses at the end of the fifth year for R10 000. Glen Coach Tours Limited intends to take up this option. The interest rate implicit in the agreement is 12%. The following present value table is provided as follows for the discount factors.

PV factor Present value of annuity in arrears of R1 for five years, at 12% 3,6048

Present value of annuity in arrears of R1 for four years, at 12% 3,0375

Present value of annuity in arrears of R1 for three years, at 12% 2,4018

Present value of annuity in arrears of R1 for two years, at 12% 1,6901

Present value of R1 in five years, discounted at 12% 0,5674

The estimated useful life of the buses is eight years, with an estimated residual value of R7 000. The buses are to be depreciated on a straight-line basis. The fair value of the buses at the inception of the lease is R492 322 Required:

a) Prove that the rate of interest implicit in the lease is 12%. (10) marks

b) Prepare the journal entries to account for the lease in the accounting records of Glen Coach Tours Limited for the year ending 30 June 2021. (20) marks

c) Prepare an extract from the statement of financial position of Glen Coach Tours Limited at 30 June 2022 showing the disclosure of the non-current assets, noncurrent liabilities and current liabilities. (10) marks

d) Prepare the lease note to support the disclosure of the lease in the financial statements of Glen Coach Tours Limited for the year ended 30 June 2022, in accordance with International Financial Reporting Standards. (10) marks

Comparative figures are not required. Round your calculations to the nearest whole number. Ignore tax.