Question 4 (11 marks) (This question is from the Week 9 Tutorial) Fred Ltd acquired an item of equipment and enters into a non-cancellable lease agreement with Melbourne Equipment Ltd on the 1st January, 2015. The lease consists of the following information: o Date of inception: o Duration of the lease: Life of the leased asset: o Lease Payments (annual): 1/1/15 4 years 5 years $320,000 (annual) which includes $40,000 for Maintenance and insurance costs per annum. o Guaranteed residual value (Added to the final payment): o Interest Rate: $120,000 10% Required: a) Determine the present value of minimum lease rental payment. (1 mark) b) Prepare the journal entries for John Ltd (the Lessee) using the Net Method for the following: o Transfer of control. (5 marks) o Payment of annual payments for 2015 and 2016. (5 marks) Question 4 (11 marks) (This question is from the Week 9 Tutorial) Fred Ltd acquired an item of equipment and enters into a non-cancellable lease agreement with Melbourne Equipment Ltd on the 1st January, 2015. The lease consists of the following information: o Date of inception: o Duration of the lease: Life of the leased asset: o Lease Payments (annual): 1/1/15 4 years 5 years $320,000 (annual) which includes $40,000 for Maintenance and insurance costs per annum. o Guaranteed residual value (Added to the final payment): o Interest Rate: $120,000 10% Required: a) Determine the present value of minimum lease rental payment. (1 mark) b) Prepare the journal entries for John Ltd (the Lessee) using the Net Method for the following: o Transfer of control. (5 marks) o Payment of annual payments for 2015 and 2016