Loot Ltd manufactures specialized moulding machinery for both sale and lease. On 1 July 2015, Loot Ltd leased a machine to Hotinpursuit Ltd, incurring $1500 in costs to prepare and execute the lease document. The machine being leased cost Loot Ltd $195000to make and its fair value at 1 July 2015 is considered to be $212515. The terms of the lease agreement are as follows:

Lease term commencing on 1 July 2015 5 years

Annual lease payment commencing on 1 July 2016 $57500

Estimated useful life of machine (scrap value $2500) 8 years

Estimated residual value of machine at end of lease term $37000

Residual value guaranteed by Hotinpursuit Ltd $25000

Interest rate implicit in the lease 10%

The lease is classified as a finance lease.

The annual lease payment includes an amount of $7500 to cover annual maintenance and insurance costs. Actual executory costs incurred for each of the 5 years were:

2015-16 $7200

2016-17 7700

2017-18 7800

2018-19 7100

2019-20 7000

Hotinpursuit Ltd may cancel the lease but will incur a penalty equivalent to 2 years payments if it does so. Hotinpursuit Ltd intends to lease a new machine at the end of the lease term. The end of the reporting period for both companies is 30 June.

Required

A.Prepare a schedule of lease receipts for Loot Ltd.