Q-3: 18 On January 1, 2014, A Ltd. signed a 4 years non-cancellable contract to lease a computer from B Ltd. requiring equal rental payments of $26,720 at the beginning of each year. The economic life of the asset is 5 years and at the end of the lease period there will be a bargain purchase option for the lessee. The cost and fair value of the computer was $90,000 & $100,000 respectively and the amount of the unguaranteed residual value is $10,000. A Ltd. has an incremental borrowing rate of 12% but has no knowledge that B Ltd. used a rate 10% in setting annual rentals. Collection of the rentals is reasonably predictable and there are no important uncertainties regarding future un- reimbursable costs to be incurred by the lessor. At the end of the lease term the computer was purchased by the lessee at a price of Tk 15,000. PVIFAD (10%.4) - 3.48685; PVIF (10%,4) -0.68301, PVIFAD (12%.4) - 3.40183; PVIF (12%.4) -0.63552 Instructions: Record the necessary journal entries in the books of A Ltd