On 1 July 2021, Collie Ltd (lessee) entered into a contract with Dasch Ltd (lessor) to lease an item of equipment held in the inventory of Dasch Ltd at a cost of $168,000. The equipment has a useful life of 8 years. The terms of the lease contract are as follows:

• Duration of the lease is six years.
• Six annual payments of $40,000 commencing on 30 June 2022.
• Guaranteed residual value of $10,000.
• The interest rate implicit in the lease is 10%.
• The lease is non-cancellable.
• The fair value of the equipment is $179,853.

Required:

Please fill in the blanks.

The format of your answer MUST be as follows: $1,000,000.

Any present value calculations MUST be done using the present value Tables 1 and 2 from the Issues textbook. (Scanned copies are available on Blackboard in learning resources for weeks 3 and 4). Round to whole numbers.

Identify which of the following statements about the lease in the context of AASB 16 Leases is NOT CORRECT by entering the letter of the incorrect statement. Please fill in your selected answer (A, B, C or D) in the blank .

A. The lease is a manufacturer or dealer finance lease.

B. Dasch Ltd would recognise a profit on the sale of the equipment equal to $11,853.

C. The income recognised by Dasch Ltd in relation to the lease includes sales revenue at the time the lease commences and finance income over the lease term.

D. Dasch Ltd would recognise a profit on the sale of the equipment equal to $72,000.

What is the interest income recognised by Dasch Ltd on 30 June 2022? Please fill in your answer in the blank____________.