The following are a series of unrelated situations. Answer the questions relating to each of the following independent situations as requested: 7) On January 1, 2022, Holmes Leasing plc leases computer hardware to Watson Ltd. The term of the noncancelable lease is 2 years, and payments are required at the end of each year. The following information relates to this agreement: i) Watson Ltd. has the option to purchase the hardware for 11,000 upon termination of the lease. ii) The equipment has a cost and fair value of 100,000 to Holmes Leasing ple. The useful economic life is 2 years, with a salvage value of 11,000. iii) Holmes Leasing plc desires to eam a return of 9% on its investment. iv) Collectibility of the payments is probable. Instructions a) Prepare the journal entries on the books of Holmes Leasing to reflect the payments received under the lease and to recognize income for the years 2022 and 2023. b) Assuming that Watson Ltd, exercises its option to purchase the equipment on December 31, 2023, prepare the journal entry to reflect the sale on Holmes' books. c) Show the presentation of the lease on Holmes' statement of financial position at December 31, 2022. 8) Riyad enters into an agreement to lease an asset. The terms of the lease are as follows. a) Primary period is for four years from 1 January 20x2 with a rental of $2,000 per annum payable on 31 December each year. b) The present value of the lease payments is $5,710. c) The interest rate implicit in the lease is 15%. Instructions Prepare extracts of financial statements for the year ended 31 December 20X2 in order to show what figures will be shown in these statements