QUESTION 1 PART A Heavy Metal Ltd has requested your help in preparing their financial statements as they are unsure of the new requirements of NZ IFRS 16 Leases for lessees. You are provided with the following lease details: Heavy Metal Ltd is the: Commencement date Lease term Economic life of asset Interest expense SCF classification IDC incurred by the lessee Upfront payment due on the commencement date Fixed payments per annum payable at year end Extra final payment at end of the lease Ownership transfers to the lessee at end of lease Lessee's incremental borrowing rate The depreciation method used by the lessee The relevant present value discount factors are: Present value of $1 in n periods n= 7 Present value of an annuity i=8% Lessee 1 April 2019 7 years 8 years CFFA $4 200 $40 000 $120 000 $40 000 Yes 8% Straight line 0.5835 5.2064 Required: (i) Prepare the journal entry to initially recognise the ROU asset and lease liability, at the commencement date. Complete the lessee's table in the space provided. (ii) Prepare financial statements for Heavy Metal Ltd to reflect the effects of the lease for the financial periods ending 31 March 2020, 2021, 2025, and 2026