On 1 July 2019, Silver Ltd leased a water purifying machine from Stream Ltd. Stream Ltd had purchased the machine on that day for its fair value of $279 788. The lease agreement contained the following provisions:

	Lease term Initial payment on 1 July 2019 Annual rental payment, in arrears (four payments commencing 30 June 2020) Residual value at end of the lease term (Proportion of residual guaranteed by the lessee) Residual value at the end of the useful life Interest rate implicit in lease		4 years $60 000 $62 000 $15 000 (100%) $5 000 6%

The lease is cancellable only with the permission of the lessor. The expected useful life of the machine is 6 years. The machine is to be transferred to the lessee at the end of the lease. Included in the annual rental payment of $62 000 is an amount of $2 000 to cover the costs of maintenance and insurance paid for by the lessor.

REQUIRED

1. Provide journal entries for the year ending 30 June 2020 as shown in the books of Silver Ltd (the lessee) in accordance with AASB 16 Leases. Exclude journal narrations. (9 marks)
2. Provide journal entries for the year ending 30 June 2020 as shown in the books of Stream Ltd (the lessor) in accordance with AASB 16 Leases. Exclude journal narrations. (7 marks)