Mission Ltd manufactures specialised moulding machinery for both sale and lease. On 1 July 20W9, Mission Ltd leased a machine to Impossible Ltd, incurring $1,500 in costs to prepare and execute the lease document. The machine being leased cost Mission Ltd $195,000 to make and its fair value at 1 July 20W9 is considered to be $212,515. The terms of the lease agreement are as follows: Lease term commencing on 1 July 20W9 Interest rate implicit in the lease arrangement Annual rental payments (commencing 1 July 20X0) Estimated useful life of machine (scrap value $2,500) Estimated residual value of machine at end of lease term Residual value guaranteed by Impossible Ltd Amount of the residual value guarantee that is expected to be payable by the lessee at the end of the lease term The lease is classified as a finance lease by Mission Ltd 5 years 10% $57,500 8 years $37,000 $25,000 $25,000 The annual lease payment includes an amount of $7,500 to cover annual maintenance and insurance costs. Actual executory costs for each of the 5 years were: 20W9-X0 $7,200 20X0-X1. 7,700 20X1-X2 7,800 20X2-X3 7,100 20X3-X4 7,000 Impossible Ltd may cancel the lease but will incur a penalty equivalent to 2 years' payments if it does so. Impossible 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 1. Prepare a schedule of lease payments for Impossible Ltd. 2. Prepare the general journal entries to record the lease transactions for the year ended 30 June 20X0 in the records of Impossible Ltd. 3. Prepare a schedule of lease receipts for Mission Ltd. 4. Prepare the general journal entries to record the lease transactions for the year ended 30 June 20X0 in the records of Mission Ltd.

Mission Ltd manufactures specialised moulding machinery for both sale and lease. On 1 July 20 W9, Mission Ltd leased a machine to Impossible Ltd, incurring $1,500 in costs to prepare and execute the lease document. The machine being leased cost Mission Lt $195,000 to make and its fair value at 1 July 20 W9 is considered to be $212,515. The terms of the lease aerenment arn ae follinue. The annual lease payment includes an amount of $7,500 to cover annual maintenance and insurance costs. Actual executory costs for each of the 5 years were: Impossible Ltd may cancel the lease but will incur a penalty equivalent to 2 years' payments if it does so. Impossible 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 lune. Required 1. Prepare a schedule of lease payments for Impossible ttd. 2. Prepare the general journal entries to record the lease transactions for the year ended 30 June 200 in the records of Impossible Ltd. 3. Prepare a schedule of lease receipts for Mission ttd. 4. Prepare the general journal entries to record the lease transactions for the year ended 30 June 200 in the records of Mission Ld