Pembinaan Teguh Berhad enters into a nine-year noncancelable lease agreement with Star Machine Berhad on 1 January 2018. According to the agreement, Pembinaan Teguh Berhad get the right to use an equipment supplied by Star Machine Berhad, with an option that allow the lessor to extend the lease for one year beyond the lease term. The equipment has an estimated useful life of 10 years and a fair value to the lessor at the inception of the lease of RM4 million. Pembinaan Teguh Berhad has an incremental borrowing rate of 8% and uses the straight-line method to depreciate its assets. The lease agreement also contains the following provisions: Rental payments of RM266,000(nett of property taxes) is payable at the beginning of each SIX- month period. A guarantee by Pembinaan Teguh Berhad that Star Machine Berhad will realise RM200,000 from selling the asset at the expiration of the lease. However, the actual residual value is expected to be RM120,000. Required: a) According to MFRS 16 Leases, explain FIVE (5) tests used in determining whether a lessor should use the finance lease or operating lease approach. (5 marks) b) State the type of this lease to Pembinaan Teguh Berhad. Justify your answer. (2 marks) c) Determine the number of years should be considered as the lease term. (1 markah/mark) d) Calculate the present value of the lease payments for Pembinaan Teguh Berhad (round off to the nearest Ringgit Malaysia): () for classification of the lease (3 marks) (ii) for measurement of the lease liability. (3 marks) e) Prepare the journal entries in the book of Pembinaan Teguh Berhad during the first year of the lease. (Prepare an amortization schedule till 1 January 2019 and round off to the nearest Ringgit Malaysia.) (7 marks) f) Discuss the differences between a direct-financing lease and a sales-type lease. (6 marks) g) Explain the major difference in MFRS 16 Leases in comparison to MFRS 117 Leases