Task 1 On 1 October 2020, Bulat Bhd entered into a contract with Bujur Leasing Sdn Bhd to use a piece of machinery for a four-year period. The machine is assembled and installed at Bulat's premise. The machine will be used by Bulat to produce bottled drinks for sale. Bujur Leasing Sdn Bhd will provide monthly maintenance service to Bulat Bhd during the contract period. Also, if the machine is damage during the period, Bujur Leasing will provide a replacement unit to Bulat while the machine is being repaired. Ownership will be transferred to Bulat Bhd at end of the four years contract period. Under the contract, Bulat Bhd is to pay rental of RM75,000 on 30 September 2021, followed by 3 subsequent payments of RM70,000 starting from 30 September 2022. The fair value of the machinery at inception was RM270,000 with an estimated useful life of 6 years. Bulat Bhd will have to pay penalty if Bulat Bhd were to cancel the lease during the four years period. The rental payment was calculated and mutually agreed to be based on 4.5% rate of return. Required: 1. Assist Bulat Bhd with the following: (a) Compute the present value of the lease liability at inception of the lease. (5 marks) (b) Prepare journal entries for the financial year ended 30 September 2021. (10 marks) 2. Explain whether Bujur Leasing Sdn Bhd should classify the lease transaction as finance lease or operating lease. (10 marks) 3. If Bujur Leasing Bhd were to classify the lease as operating lease: (a) Explain how the lease should be accounted for in its books. (12 marks) (b) Show journal entries for financial year ended 30 September 2021 and 2022. (13 marks)