Hasselback Ltd enters into a finance lease with Larry Ltd on 1 July 2017 for an item of machinery that has a fair value at that date of $226 718. The lease is for a period of four years, with annual lease payments of $62 000 due on 30 June each year, the first payment to be made on 30 June 2018. There is a bargain purchase option of $15 000 available for Larry to exercise at the end of the lease period. The rate of interest implicit in the lease is 6%. It cost Hasselback Ltd $190 000 to manufacture the machine.

Required

What are the entries in the books of Hasselback Ltd as at 1 July 2017 and 30 June 2018 (round amounts to the nearest dollar)?

Group of answer choices

None of the given answers.

(c) 1 July 2017
Dr	Lease Receivable	$226 718
Cr	Machine		$190 000
Cr	Deferred Gain		$36 718

(c) 30 June 2018
Dr	Cash	$62 000
Dr	Deferred Gain	$9 180
Cr	Interest Revenue		$13 603
Cr	Lease Receivable		$57 577

(b) 1 July 2017
Dr	Lease Receivable	$226 718
Dr	Cost of Sales	$190 000
Cr	Inventory		$190 000
Cr	Sales		$226 718

(b) 30 June 2018
Dr	Cash	$62 000
Cr	Interest Revenue		$13 603
Cr	Lease Receivable		$48 397

(d) 1 July 2017
Dr	Lease Receivable	$263 000
Cr	Unearned Interest		$36 282
Cr	Machine		$226 718

(d) 30 June 2018
Dr	Cash	$62 000
Cr	Unearned Interest		$9 071
Cr	Lease Receivable		$52 929

(a) 1 July 2017
Dr	Lease Receivable	$226 718
Cr	Machine		$226 718

(a) 30 June 2018
Dr	Cash	$62 000
Cr	Interest Revenue		$13 603
Cr	Lease Receivable		$48 397