T24 Ltd (Lessor) has entered into an agreement to lease a customised equipment to BYO Ltd (Lessee). The lease agreements details are as follows:

Additional information: If the equipment needs to be serviced or repaired, T24 Ltd is required to substitute a equipment of the same type. Otherwise, and other than on default by BYO Ltd, T24 Ltd cannot retrieve the equipment during the three-year period. At the end of the lease term, assume the transfer of asset from T24 Ltd to BYO Ltd. BYO Ltd prepares financial statements at the end of every quarter.

Required:

Prepare a schedule of lease payments for BYO Ltd, for the period from lease inception to the end of the agreement (1/7/2020 to 31/6/2023).

Length of lease 3 years Commencement date of lease agreement 1/7/2020 Quarterly lease payment, paid in arrears (at the end of each quarter) $44,000 $4,000 Included within the $44,000 quarterly lease payments is an amount of representing payment to T24 Ltd for the insurance and maintenance of the equipment Initial direct costs incurred (and paid) by BYO Ltd on 1/7/2020 $20,000 Commencement date of lease payment 30/9/2020 Estimated economic life of the equipment 15 years Estimated residual value of the equipment at the end of its economic life $20,000 Purchase option at the of the lease term available for BYO Ltd to exercise $60,000 Market value of the equipment at the end of the lease term $250,000 Interest rate implicit in the lease (per year) 8% | Lessee's incremental borrowing rate (per year) 13%