Question 5 of 5 - /6 = View Policies Current Attempt in Progress On 1 July 2020, Sherlock Ltd leased a processing plant to Holmes Ltd. The plant was purchased by Sherlock Ltd on 1 July 2020 for its fair value of $439,085. The lease agreement contained the following provisions. Lease term 3 years 3 5 years Economic life of plant Annual rental payment, in arrears (commencing 30/6/2021) $141,000 $85.000 Residual value at end of the lease term Residual guaranteed by lessee $56,000 $ Interest rate implicit in lease 7% The lease is cancellable only with the permission of the lessor. Holmes Ltd intends to return the processing plant to the lessor at the end of the lease term. The lease has been classified as a finance lease by both the lessee and the lessor. 1. (a) Prepare the lease payment schedule for the lessee. (Round factor values to 4 decimal places, e.g. 5,2752 and final answers to O decimal places, eg. 5,275.) Holmes Ltd (lessee) Lease payments schedule Minimum lease payments $ Interest expense $ Liability reduction $ Liability balance $ 1 July 2020 30 June 2021 30 June 2022 30 June 2023 *Note: The total of this column must equal the initial liability balance, which may require rounding the final interest revenue figure. Save for Later Attempts: 0 of 3 used Submit