On 1 July 2017, Tedd Ltd leased a large truck from Todd Ltd. The truck had a fair value of $54,000 on 1 July 2017. The lease agreement contained the following provisions:

• Lease term 3 years
• Annual lease payment in arrears on 30 June each year $20,000.
• Expected residual value at the end of the lease term $10,000.
• There is $5,000 residual value guaranteed by Tedd Ltd.
• Interest rate implicit in lease 11%.
• The lease is non-cancellable.
• The expected economic life of the machine is 5 years.
• Tedd Ltd intends to return the truck at the end of the lease term.
• Both companies apply AASB 16 "Leases" for the accounting treatment of lease transactions.

Required

1. Calculate the present value of lease payments (show all workings). (2 marks)
2. Prepare the lease schedule for the lessee. (1 marks)
3. Prepare the journal entries for the lessee on 1 July 2017. (1 marks)
4. Prepare the journal entries for the lessee on 30 June 2018. (1 marks)

Financial Tables

Please use the following table to answer the question. You can select and paste the table in writing area.

Schedule of Lease Payment for the Lessee
Date	Lease Payment	Interest Expense	Liability Reduction	Liability Balance