On 1 July 2021, Ooh Na Na Ltd leased a plastic-moulding machine from Havana Ltd. The machine cost Havana Ltd $130000 to manufacture and had a fair value of $199,636 on 1 July 2021. The lease agreement contained the following provisions:

Lease Term	5
Annual Payment in arrears	50000
Residual value at the end of the lease	15000
Residual value guaranteed by the lessee	0
Interest rate implied	8%

The expected useful life of the machine is 6 years. Ooh Na Na Ltd intends to return the machine to the Havana Ltd at the end of the lease term. Included in the annual rental payment is an amount of $5,000 to cover the costs of maintenance and insurance paid for by the lessor.

Answer the following questions (all answers rounded to nearest dollar)

Group of answer choices

PV of lease payments

[ Choose ] 42,132 Dr Interest Revenue, Cr Cash 30,626 33,147 199,636 35,934 16,853 Dr Interest Expense, Cr Lease Asset Dr Right of Use Asset, Cr Lease Liability 14,374 15,971 165,606 34,029 39,927 210,661 149,046 179,672 Dr Lease Receivable, Cr Asset 177,514

Interest in first year

[ Choose ] 42,132 Dr Interest Revenue, Cr Cash 30,626 33,147 199,636 35,934 16,853 Dr Interest Expense, Cr Lease Asset Dr Right of Use Asset, Cr Lease Liability 14,374 15,971 165,606 34,029 39,927 210,661 149,046 179,672 Dr Lease Receivable, Cr Asset 177,514

Principle repaid in first year

[ Choose ] 42,132 Dr Interest Revenue, Cr Cash 30,626 33,147 199,636 35,934 16,853 Dr Interest Expense, Cr Lease Asset Dr Right of Use Asset, Cr Lease Liability 14,374 15,971 165,606 34,029 39,927 210,661 149,046 179,672 Dr Lease Receivable, Cr Asset 177,514

Balance of Lease liability after first year

[ Choose ] 42,132 Dr Interest Revenue, Cr Cash 30,626 33,147 199,636 35,934 16,853 Dr Interest Expense, Cr Lease Asset Dr Right of Use Asset, Cr Lease Liability 14,374 15,971 165,606 34,029 39,927 210,661 149,046 179,672 Dr Lease Receivable, Cr Asset 177,514

Initial journal entry for Lessee

[ Choose ] 42,132 Dr Interest Revenue, Cr Cash 30,626 33,147 199,636 35,934 16,853 Dr Interest Expense, Cr Lease Asset Dr Right of Use Asset, Cr Lease Liability 14,374 15,971 165,606 34,029 39,927 210,661 149,046 179,672 Dr Lease Receivable, Cr Asset 177,514

Depreciation (S.L.) p.a.

[ Choose ] 42,132 Dr Interest Revenue, Cr Cash 30,626 33,147 199,636 35,934 16,853 Dr Interest Expense, Cr Lease Asset Dr Right of Use Asset, Cr Lease Liability 14,374 15,971 165,606 34,029 39,927 210,661 149,046 179,672 Dr Lease Receivable, Cr Asset 177,514