On 1 April 2017, Frank & Stein Bar Limited, leased a number of sofas, benches, tables and chairs from Furniture Direct Limited. The total fair value of these items was $9,000. The term of the lease is for 5 years, after which all the leased items will be returned to the lessor. Frank & Stein Bar Limited use straight-line depreciation for its furniture items. There is an initial lease payment of $340 on the inception of the lease (1 April 2017) and annual lease payments of $2,000 on the 31 March each year thereafter (starting 31 March 2018). The interest rate implicit in the lease contract is 5%.

Required:

(a) Produce a lease payment schedule for the 5 years of the lease term.

(b) Provide ALL the necessary journal entries relating to the lease arrangement in the books of Frank & Stein Bar Limited from the inception of the lease to 31 March 2018 (i.e. the end of the first year of the lease).