(ii) prepare the journal entries on the lessees books to reflect the lease agreement and to record the payments and expenses related to this lease for the year 2019 and 2020.

Awesome Limited, which has an accounting year end on 31 December, had entered into two lease agreements with the following entities: Warehouse Awesome signs a 8-year, non-cancelable lease agreement to lease a warehouse from Best Logistics. The following information are extracted from the agreement: 1. The agreement requires equal rental payments of $25,000 at the beginning of each year, starting from 31 December 2019. 2. The fair value of the warehouse on 31 December 2019, is $180,000 3. The warehouse has an estimated useful life of 20 years, a guaranteed residual value of $12,000, and an expected residual value of $7,000. Awesome depreciates similar assets using the straight-line method. 4. In addition to the annual rental payment, Awesome is required to pay an annual insurance fee of $ 2,000 to lessor directly. The annual insurance fee is paid on every 31 December, starting from 31 December 2019. 5. The lease is non-renewable and the asset has to be reverted back to the lessor at the termination of the lease. Awesome Limited, which has an accounting year end on 31 December, had entered into two lease agreements with the following entities: Warehouse Awesome signs a 8-year, non-cancelable lease agreement to lease a warehouse from Best Logistics. The following information are extracted from the agreement: 1. The agreement requires equal rental payments of $25,000 at the beginning of each year, starting from 31 December 2019. 2. The fair value of the warehouse on 31 December 2019, is $180,000 3. The warehouse has an estimated useful life of 20 years, a guaranteed residual value of $12,000, and an expected residual value of $7,000. Awesome depreciates similar assets using the straight-line method. 4. In addition to the annual rental payment, Awesome is required to pay an annual insurance fee of $ 2,000 to lessor directly. The annual insurance fee is paid on every 31 December, starting from 31 December 2019. 5. The lease is non-renewable and the asset has to be reverted back to the lessor at the termination of the lease