On 30 June 2023, Lovett Ltd. leased a machine from Martin Ltd. The finance lease agreement contained the following provisions: Lease term 4 years Annual rental payment, in advance on 30 June each year (starting at 30/06/2022) $39,800 Estimated useful life of asset 6 years Estimated residual value of machine at end of lease term $9,000 Residual value guarantee by lessee $12,000 Interest rate implicit in the lease 9% .

The lease is cancellable, but only with permission from the lessor. Included in the annual rental payment is an amount of $1,510 to cover the costs of maintenance and insurance paid for by the lessor. Required:

a. Calculate the lease liability and the right-to-use asset.

b. Prepare the lease schedules for the lessee.

c. Prepare the journal entries of the lessee on 30 June 2023