Hag ques Question 3: Accounting for Leases -17 Marks Thomas Ltd enters into a 4-year lease agreement with Bronte Ltd on 1 July 2021 for an item of equipment. Thomas Ltd pays $8,000 to enter the lease contract (direct costs). Bronte Ltd incurs $10,000 of direct costs in arranging the lease. There is a payment of $170,000 to be made each year, with the first being made on 1 July 2021. Included in these payments is $20,000 representing payment to Bronte Ltd for insurance and maintenance of the equipment. There is a purchase option that Thomas Ltd will be willing to exercise at the end of the fourth year for $120,000. The equipment is expected to have a useful life of 6 years and a residual value of $15,000 at the end of its useful life. The interest rate implicit in the lease is 7%. You must show all your workings. This question has five Parts. Answer Parts (a) to (e) in the spaces provided below: Part (a) Determine the initial measurement of the lease liability. (3 Marks) Part (b) Determine the initial measurement of the right-of-use asset. (2 Marks) Part (c) Calculate the stream of interest expenses across the lease term. (4 Marks) Part (d) Calculate the annual amortisation on the right-of-use asset. (2 marks) Part (e) See below 11:00