Question$1$

NNN entered into a lease agreement on $1$ January to lease a machine for six years. The contract requires a deposit of RM$2,000$ on signing the lease plus a further five payments of RM$2,000$ at the end of each year. NNN has an option to buy the asset at the end of year six for RM$500,$ which it expects to exercise with reasonable certainty. NNN will depreciate the machine over $8$ years on a straight$-$line basis. The rate of the interest implicit in the lease is $10\%.$ When the annual discount rate is $8\%,$ the present value of RM$1$ annuity payable at the end of years $16$ is $4\mathrm{.}623.$ The PV of single ringgit at year end in year $6$ is $0\mathrm{.}630.$

Required:

a$)$ Calculate the lease liability at the inception of the lease.

b$)$ Prepare lease table from year $1$ until year $3.$

c$)$ Calculate depreciation amount.

d$)$ Prepare relevant journal entries in the book of NNN$.$

e$)$ Prepare extract of NNN$$s statement of profit or loss and statement of financial

position in the first year of lease.