On 1 July 2019, Maria Ltd enters a 5 years lease agreement with John Ltd to obtain the right to use ten photocopiers. The photocopiers have a useful life of 6 years. Lease payments of $50,000 are to be made at the end of each financial year for 5 years starting on 30 June 2020. To enter the lease, it costs Maria Ltd $5,000 to seek for professional advice. The residual value guaranteed by the lessee is $10,000 and the implicit interest rate in the lease contract is 9% p.a.

Additional information:

Interest Rate: 9%

Present Value of $1 in 5 years: 0.6499

Present Value of an annuity of $1 for 5 years: 3.8897

REQUIRED

Calculate the lease liability and the right-to-use machine cost to be recognised by Maria Ltd as at 1 July 2019, in accordance with AASB 16 Leases.

Complete the lease payment schedule for 30 June 2020; 30 June 2021 and 30 June 2022.

Provide the journal entries for Maria Ltd to record the commencement of the lease agreement on 1 July 2019.

Provide the journal entries for Maria Ltd to record the first interest payment on 30 June 2020.