Prepare the relevant General Journal entries in September 2021 that are appropriate for the relevant information below. 1. During the year, the company developed a new brand strategy Buy now, Pay Later. The costs incurred were $21,000 on salaries and $7,000 in other costs such as artwork, consumer surveys etc. These costs have been capitalised as an intangible asset as the previous financial controller wanted to maintain the profitability of the company. 2. On 1 August 2021, MyPay undertook a review of its Intangible assets. Goodwill, with a carrying value at 30 June 2021 of $24,500, was determined to have suffered an impairment loss of $6,500. 3. MyPay has been involved in a project to develop a smart payment device to be attached to merchandise that is invisible to the eye, with the aim of reducing the losses due to theft as well as selling this to other retailers. It started the project in August 2019. Between the starting date and 31 August 2021, the company spent $22,500 on the project. At 31 August 2021, there was no indication that the project would be commercially feasible, although the company had made significant progress and was sufficiently sure of future success that it was prepared to outlay more funds on the project.

a.After spending a further $11,000 during February 2021, the company had built a prototype that appeared to be successful. b. The prototype was demonstrated to a number of engineering companies during April 2021, and several of these companies expressed interest in the further development of the device. c. Convinced that it now had a product that it would be able to sell, the company spent a further $9,500 during May 2021 adjusting for the problems that the engineering firms had pointed out. d. On 1 June 2021, the company applied for a patent on the device, incurring legal and administrative costs of $2,500. The patent had an expected useful life of 20 years and was renewable for a further 5 years upon application. e. All of these costs have been capitalised as an R&D intangible asset.

4. MyPay entered into a 5-year agreement to lease an item of equipment from All Finance Leasing Ltd on 1 July 2021. The equipment has a fair value of $77,000 at the inception of the lease and it is expected to have an economic life of 5 years, after which time it will have a residual value of $12,000. The lease agreement details are as follows: - 5 years 1 July 2021 Length of lease Commencement date Annual lease payment, payable 30 June each year commencing 30 June 2021 Residual value at the end of the lease term Interest rate implicit in the lease $ $ 16,000 12,000 6% This transaction has not been entered into the financial statements as at 31 August 2021. You are requested to prepare a lease schedule (see below) and journalise this transaction including the first lease payment for the period to 30 June 2022 and any other related journal entries. Calculations to the nearest dollar. (20 marks). Lease schedule Interest expense Lease Payment Principal reduction PV of lease liability Date 1-Jul-22 1-Jul-23 1-Jul-24 1-Jul-25 1-Jul-26 1-Jul-27 16,000 16,000 16,000 16,000 16,000 4. MyPay entered into a 5-year agreement to lease an item of equipment from All Finance Leasing Ltd on 1 July 2021. The equipment has a fair value of $77,000 at the inception of the lease and it is expected to have an economic life of 5 years, after which time it will have a residual value of $12,000. The lease agreement details are as follows: - 5 years 1 July 2021 Length of lease Commencement date Annual lease payment, payable 30 June each year commencing 30 June 2021 Residual value at the end of the lease term Interest rate implicit in the lease $ $ 16,000 12,000 6% This transaction has not been entered into the financial statements as at 31 August 2021. You are requested to prepare a lease schedule (see below) and journalise this transaction including the first lease payment for the period to 30 June 2022 and any other related journal entries. Calculations to the nearest dollar. (20 marks). Lease schedule Interest expense Lease Payment Principal reduction PV of lease liability Date 1-Jul-22 1-Jul-23 1-Jul-24 1-Jul-25 1-Jul-26 1-Jul-27 16,000 16,000 16,000 16,000 16,000