Question 16 On 1 July 2021, Burke Ltd leases equipment for five years from Wills Ltd at an annual rental of $20 000, with the first payment payable on 30 June 2022. The equipment has a useful life of 6 years and it could have been purchased from the supplier for $75.814. The rate of interest implicit in the lease is 10%. Wills Ltd classifies the lease as a finance lease in accordance with AASB16 Leases. Required: Please fill in the blanks. The format of your answer to the calculations MUST be as follows: $1,000,000. Any present value calculations MUST be done using the present value Tables 1 and 2 from the Issues textbook. (Scanned copies are available on Blackboard in learning resources for weeks 3 and 4). Round to whole numbers. Identify which of the following statements about the lease classification is NOT CORRECT by entering the letter of the correct statement. Please fill in your selected answer (A, B, C or D) in the blank. A. The present value of the lease payments amounts to substantially all of the fair value. B. Since there is no guaranteed residual value or bargain purchase option and therefore the transfer of ownership is unlikely, Wills has incorrectly classified the lease as a finance lease. It should be classified as an operating lease. C. The lease term is for the major part of the economic life of the equipment, which is an indicator that the lease has transferred substantially all of the risks and rewards of ownership from Wills to Burke. D. Even though Wills Ltd legally owns the equipment, it will not record any depreciation for accounting purposes. The present value of the lease payments is equal to $ Please fill your answer to the blank. What is the amount of interest income recorded by Wills at 30 June 2022? Please fill your answer to the blank