To help students with their study, Large Mart is currently developing a Smart highlighter pen, this highlighter allows students to highlight text which is converted from text-to-voice and add highlighted text to a study notes app. However, Large Mart is aware that they are not the first pioneer for this product as Narita Ltd., a Japanese company, is currently registered as the owner of the smart highlighter pens patent. For legal purposes, Large Mart needs to stop developing their product. Instead, Large Mart will import a Smart highlighter pen, called iRead from Narita Ltd.

Large Mart has rented a store in the middle of Sydney. Large Mart signs a one year rental contact for a store on 1^st April 202x. The rent for this store will be $4,000 per month and the contract requires Large Mart to pay rent every 3 months starts from beginning of the contract.

As soon as the contract for the rent of new store is signed, Large Mart employs Samuel Phillips as staff. Samuel is employed on a casual basis for 6 hours a day. Samuel can only work Monday through to Friday. He starts his job on 1^st April 202x (assume that 1 April is Monday) and will be paid $35 per hour and will get paid at the end of the month. Samuel is also an online student and thinks it will be useful for his study to purchase a Smart highlighter pen. Therefore, at the end of June, Samuel buys a Smart highlighter pen with a value at cost of $800 from the store and this will be deducted from his wage as salary sacrifice that is only offered for Large Mart staff. Samuel receives the rest of his wage in cash.

To make the iRead store look modern, Large Mart needs to purchase new furniture. New furniture is delivered on 15^th May 202x. On that day, large Mart receives an invoice of $53,000 from the furniture shop in Brisbane. On 1^st May 202x, before Large Mart purchase the new furniture, a store manager made a trip to visit the furniture shop in Brisbane to discuss about the design of the new furniture. The cost of the travel is $2,000 and during the trip, the manager got a $500 fine for speeding. All costs of this trip were incurred on Large Marts credit card.

After the new store is completed, Large Mart orders 200 iReads from Narita Ltd. for a price of cost $800 per iRead, and these iReads arrive on 1st June 202x, and are paid via bank transfer 5 days later.

• On 5th June 202x, UNE purchases 150 iReads for the library for a price of $1,000 per iRead on credit.
• On 6th June 202x, Large Mart purchases another 100 iReads from Narita Ltd on credit. Large Mart receives a 10% discount on the day they purchase and receives the iReads on the same day.
• On 8^th June 202x, UNE returns 10 iReads that they bought on 5^th June 202x.
• On 10^th June 202x, Large Mart paid for iReads bought on 6^th June 202x
• On 15^th June 202x, Large Mart receives the money from the sales transaction on 5^th June 202x and gives a 5% discount to UNE for early payment.
• On 17th June 202x, Large Mart sells 100 iReads to UQ for $1,200 per iReads. UQ pays via bank transfer on the same day.

On 1st July 202x, Large Mart leases a company car for the service department of the new store. The duration of the lease is 8 years, and the car has an expected useful life of 10 years. The lease contract requires Large Mart to pay $5,000 at the time the lease is signed. This payment is made via a bank transfer. A further $10,000 must be paid (also via bank transfer) on 30th June of each year during the lease period. The lease contract states that Large Mart cannot cancel the lease once the contract is signed. At the end of the lease period, Large Mart will be able to retain the car without having to pay any additional amount. The interest rate in the lease is 10%. Large Mart decided to enter into the lease agreement instead of purchasing the car because the purchase price would have been $62,000 and Large Mart did not have sufficient cash resources to make such a purchase at that time.

Please answer the following questions about the scenario outlined above:

Question 1) Provide all journal entries that are necessary in the books of Large Mart to account for the signing of the renting contract as well as the incurrence and payment of rent for the year ended June 202x, AND provide a detailed explanation of your journal entries (2.5 marks).