On 1 July 2021, Palm Littles, a firm of Brisbane-based chartered accountants, signed a four-year lease to move into commercial premises at Riverside Centre located at 123 Eagle Street in the Brisbane CBD.

Additional info on the lease:

What is the value of the lease? - $12,000 per month on the first day of the month

What is the term of the lease?- 48 months

Is there any residual value? - No residual

What is the useful life of the asset?- 40 year life for the building

Are there fixed annual increases or market reviews?- 3% on the anniversary of the lease each year

Lease incentives - fitouts? -none

Incremental borrowing rate or interest rate implicit (must know the lessors initial direct costs in establishing the lease and the unguaranteed residual value of the leased asset at the end of the lease)?- 5% Incremental borrowing rate

Required: Prepare the accounting policy note in respect of this leasing transaction for inclusion in the companys external financial statements for the year ended 30 June 2022.

Ensure that you have drafted the accounting policy note in respect of this leasing transaction for inclusion in the companys external financial statements for the year ended 30 June 2022.