On 1 July 2020, Sherlock Ltd leased a processing plant to Holmes Ltd. The plant was purchased by Sherlock Ltd on 1 July 2020 for its fair value of $467 112. The lease agreement contained the following provisions:

Holmes Ltd intends to return the processing plant to Sherlock Ltd at the end of the lease term. The lease has been classified as a finance lease by Sherlock Ltd.

Required

1. Prepare:

   1. (a) the lease payments schedule for Holmes Ltd (show all workings)

   2. (b) the journal entries in the records of Holmes Ltd for the year ended 30 June 2022.

2. Prepare:

   1. (a) the lease receipts schedule for Sherlock Ltd (show all workings)

   2. (b) the journal entries in the records of Sherlock Ltd for the year ended 30 June 2022.