On 1 July 2023, Ringwood Ltd entered into a non-cancellable lease contract to lease office equipment from Blackburn Ltd for six years. The lease contract requires Ringwood Ltd to make half-yearly lease payments of $150,000 for 6 years, on 30 June and 31 December, each year, commencing on 31 December 2023. Included within the $150,000 half-yearly lease payments, is an amount of $20,000 representing payment to Blackburn Ltd for the insurance and maintenance of the equipment. Ringwood Ltd paid $15,000 for initial direct cost associated with the lease contract. The lease contract provides that Ringwood Ltd fully guarantees the residual value of the equipment, $220,000. The office equipment will be transferred to Ringwood Ltd when this payment is made. The interest rate implicit in the lease contract is 6% per annum. Blackburn Ltd manufactured the office equipment leased to Ringwood Ltd, at a cost of $1,000,000. The equipment is expected to have a useful life of 7 years, after which time it is expected to have a residual value of $80,000. The equipment will be depreciated on a straight-line basis. * Present value factors: PV of an ordinary annuity of $1 PV of $1 Interest rate Periods 6% 3% Interest

On 1 July 2023, Ringwood Ltd entered into a non-cancellable lease contract to lease office equipment from Blackburn Ltd for six years. The lease contract requires Ringwood Ltd to make half-yearly lease payments of $150,000 for 6 years, on 30 June and 31 December, each year, commencing on 31 December 2023. Included within the $150,000 half-yearly lease payments, is an amount of $20,000 representing payment to Blackburn Ltd for the insurance and maintenance of the equipment. Ringwood Ltd paid $15,000 for initial direct cost associated with the lease contract. The lease contract provides that Ringwood Ltd fully guarantees the residual value of the equipment, $220,000. The office equipment will be transferred to Ringwood Ltd when this payment is made. The interest rate implicit in the lease contract is 6% per annum. Blackburn Ltd manufactured the office equipment leased to Ringwood Ltd, at a cost of $1,000,000. The equipment is expected to have a useful life of 7 years, after which time it is expected to have a residual value of $80,000. The equipment will be depreciated on a straight-line basis. * Present value factors: PV of an ordinary annuity of$1 PV of $1 terest rate terest rate 6% 3% 6% 3% 3.3333 9.9540 0.4970 0.7014 | 6 | 4.9173 5.4172 0.7050 0.8375 Requirements (rounded to the nearest dollar): Assuming the above contract contains a lease in accordance with AASBlS Leases, a) calculate, by showing the workings, the lease liability and lease asset for Ringwood Ltd; b) prepare a full lease schedule for Ringwood Ltd., showing the division of the lease rental into interest and principal components; and c) Provide the journal entries for the lease transactions in the books of Ringwood Ltd for the financial year ending 30 June 2024 (from 1 July 2023 to 30 June 2024). Narrations are not required