On $1$ July $20$X$4$ Near Ltd signed a contract to lease a machine from Far Ltd$.$ On the day the

lease contract was signed, Far Ltd purchased the machine at fair value. Near Ltd incurred

$$2,122$ to obtain the lease. Far Ltd incurred initial costs of $$1,475.$ The lease agreement

included the following provisions.

At the end of the lease term, the machine was returned to Far Ltd$.$

Required:

Prepare a schedule of interest expense and lease payments over the lease term for the

lease liability recognised by Near Ltd

Prepare the journal entries for Near Ltd from $30$ June $20x4$ to $30$ June $20x5.$

Calculate the fair value of the machine at the commencement of the lease.