On 1 April 2019 Orange Limited entered into an agreement to lease a machine that had an estimated life of four years. The lease period is also four years, at which point the asset will be returned to the leasing company. Annual rentals of $50,000 are payable in arrears from 31 March 2020. The machine is expected to have a nil residual value at the end of its life. The machine had a fair value of $142,750 at the inception of the lease. The lessor includes a finance cost of 15% per annum when calculating annual rentals.

Required: How should the lease be accounted for in the financial statements of Orange Limited for the year end 31 March 2020? Note: Clearly present the lease liability table.