On 30 June 2019, Momo Ltd has entered into an agreement to lease a machine to Nene Ltd. The lease agreement details are as follows:

• lease term is 5 years
• estimated economic life of the leased asset is 6 years
• 5 annual lease payments of $29,000 at the end of each year, commencing on 30 June 2020
• residual value of $20,000 at the end of the lease term is not guaranteed by Nene Ltd
• interest rate implicit in the lease is 7%

Momo Ltd purchased the machine just before the inception of the lease and classified this lease as a finance lease.

Required:

1. What is the balance of Lease Liability that Nene Ltd should record on its balance sheet at the inception date of lease?

2. What is the balance of Lease Receivable that Momo Ltd should record on its balance sheet at the inception date of lease?

3. What is the interest expense relating to the lease that Nene Ltd should record for the financial year ended on 30 June 2020?