Mark wanted to expand his business and so he arranged to lease a special machine from Twain. This machine would enable him to produce his special furniture in half the time he previously used to manufacture the furniture items. To obtain the item Mark agreed to make an annual payment of $39,000 in arrears for three years and agreed to make a guaranteed residual payment of $16,000. The lease commenced on 1 July 2019. The financial year ended 30 June each year. The residual value of the asset was $22,000 and the interest rate on the lease was 7%. The fair value of the machine was $120,307. Required: (a)Explain what type of lease this lease represents. (b)Prepare a lease payments schedule for Mark's payments (c)Show the journal entries for the year ended 30 June 2020