Question 4 On 1 July 2018, BAE Ltd entered into an agreement to lease a vehicle from Caterpillar Ltd. The present value of the vehicle on this date was $65,242. The lease agreement contained the following information.

Lease term: three years Economic life of equipment: four years An initial deposit of $10,000 Three annual lease payments of $23,000 on 30 June each year in arrears. Interest rate implicit in the lease: 12% The lease is non-cancellable. The vehicle will be returned to Caterpillar Ltd at the end of the lease period.

Required: a) Briefly explain the requirements for the lease of the vehicle by BAE Ltd in its general- purpose financial reports, according to the Accounting Standard AASB 16. Your answer should refer to the treatment of both the asset and the liability.

b) Prepare a lease schedule for BAE Ltd for the lease period.

c) Prepare general journal entries to record the lease in the books of the lessee for the year ending June 2019. Justify your entries

d) Provide an extract of the income statement and the balance sheet of BAE Ltd as at 30 June 2019.

This was all the information given in the question.

A quick response would be greatly appreciated! Thank you so much! <3