On 1 July 2019, Shane Ltd leased a truck from Bob Ltd. The truck cost Bob Ltd $80,304, considered to be its fair value on that same day. The finance lease agreement contained the following provisions.

The lease term is for 3 years, starting on	1 July 2019
Annual lease payment, payable on 30 June each year	$25,000
Estimated useful life of truck	5 years
Estimated residual value of truck at end of lease term	20,000
Residual value guaranteed by Shane Ltd	15,000
Interest rate implicit in the lease	8%
Present value of $1 annuity over 3 years at 8% per annum	2.577097
Present value of $1 lump sum in 3 years at 8% per annum	0.793832

Required

1. Prepare the lease schedule for Shane Ltd. (3 marks)

2. Prepare the journal entries in the records of Shane Ltd at the inception of the lease and for the year ended 30 June 2020. (6 marks)