Question 10.9 Accounting for a finance lease by the lessee and lessor On 1 July 2015, River Bridge Ltd leased a crane from Shield Ltd. The crane cost Shield Ltd $120 307, considered to be its fair value on that same day. The finance lease agreement contained the following provisions: The lease term is for 3 years, starting on The lease is non-cancellable Annual lease payment, payable on 30 June each year Estimated useful life of crane Estimated residual value of crane at end of lease term Residual value guaranteed by River Bridge Ltd Interest rate implicit in the lease 1 July 2015 $39.000 4 years $22 000 $16.000 7% The lease was classified as a finance lease by both River Bridge Ltd and Shield Ltd at 1 July 2015. Required The crane is returned to Shield Ltd at the end of the lease. A. Prepare (1) the lease payment schedule for the lessee (show all workings); and (2) the lease receipt schedule for the lessor (show all workings). B. Prepare the journal entries in the records of the lessee for all years of the lease. C. Prepare the journal entries in the records of the lessor for all years of the lease.