On 1 January 2012, Benson Plc took delivery of a new machine on lease under the following terms:

Lease commencing on 1 January 2012

Term 3 years

Purchase price of new machine 33,000

Borrowing rate10%

Annual payments (payable in advance)12,000

From the above information, compute the allocation of the finance charge and depreciation expense for each of the three years using the sum-of-digits method. Demonstrate all your calculations clearly.