QUESTION 2 Magnificent Bhd requires three multifunction photocopy machines to facilitate its administrative works. As the photocopier machines are quite costly, on 1 April 2020, the company entered into a lease agreement with Bravo Bhd for the use of the machines until 31 March 2024. The total fair value of the three photocopier machines at the inception of the lease was RM51,000 with the same estimated useful life of five years and no residual value. Magnificent Bhd is to pay annual lease payments of RM5,000 for each of the machine beginning 31 March 2021, its financial year-end, and the interest rate implicit in the lease was 10%. The title of all the photocopier machines are passed to Magnificent Bhd at the end of the lease period.

Required: (i) Classify the type of lease arrangement and provide justifications.

(ii) Prepare the journal entries in the books of the lessee for the year ended 31 March 2021.

(iii) Present the companys extract of Statement of Profit or Loss and Statement of Financial Position for financial year 31 March 2021 and 2022.