You are required to answer all partsfie. A, B and C). You may use the annuity and present value tables attached to the assignment OR you may use your financial calculators to calculate annuity and present value factors. Both approaches are acceptable. PART A (8 marks) Bushman Ltd enters into a contract with Lessor Ltd for the use of a ship for one year. The ship is to be used to transport wood from central Queensland to the port of Brisbane. Lessor does not have substitution rights. The contract specifies a maximum distance that the ship can be used. Bushman Ltd is responsible for operating the ship from central Queensland to the port of Brisbane and is able to choose the details of the journeys (including speed, route and rest stops) within the parameters of the contract. Bushman Ltd does not have the right to continue using the ship after the specified contract duration is over. REQUIRED: Identify whether a lease exists for Bushman Ltd in accordance with the provisions of AASB 16 'Leases. Provide any necessary explanations to support your answer. PART B (22 marks) On 1 July, 2020 Bushman Ltd entered into a four-year lease of a building from Lessor Ltd. The terms of the lease agreement are as follows. Four payments of $200,000 are due starting on 30 June 2021 (after interest has accrued) Bushman can elect to terminate the lease at any time, but they need to pay 20% of an annual lease payment for administrative purposes upon termination The economic life of the building is estimated to be ten years. The fair value of the building at the commencement of the lease is $1,000,000 At the end of the lease term, Bushman has the option to purchase the building from Lessor Ltd at a price that is 10% lower than the predicted market value of the building at that time. The interest rate implicit in the lease is 5 per cent. Assume that the contract is a lease for the purposes of AASB 16 'Leases' REQUIRED: Explain how Lessor Ltd would classify the lease in accordance with the requirements of AASB 116 'Leases". Show all necessary working, explanations and assumptions to support your answer. Also prepare the necessary journal entries for the first year in the books of Lessor Ltd lie. 1 July 2020 to 30 June 2021). PART C (20 marks) REQUIRED: Assume also that the unguaranteed residual value of the building at the end of the lease term is $100,000. Prepare any necessary journal entries in the books of Bushman Ltd for the period 1 July 2020 to 30 June 2023 to record the lease in accordance with the requirements of AASB 16 'Leases'. Show all necessary working explanations and assumptions to support your answer. tahle 1 Present value of 51 due at the end of periods continued 4.0% 4.5% 5.0% 6.0% 70% 8.0% 10.0% 12.0% 20.0" 15.0% 2 3 1 0.961 53 0.956 93 0.95238 0.943 39 0.93457 0.925 92 0.909 09 0.292 86 0.869 57 0.833 33 2 0.92455 0.91572 0.90702 0.889 99 0.873 43 0.857 33 0.8645 0.797 19 0.756 16 0.596 66 30.888 99 0.826 29 0.863 83 0.839 61 0.816 29 0.793 83 0.751 31 0.711 78 0.657 52 578 70 4 0.854 80 0.838 56 0.822 70 0.792 09 0.762 89 0.735 02 0.683 01 0.635 52 05715 0.482 25 5 0.821 92 0.802 45 0.783 52 0.747 25 0.712 98 0.680 58 0.620 92 0.567 43 0.497 18 0.401 88 5 6 60.790 31 7 0.759 91 8 0.730 69 90.702 58 10 0.675 56 0.767 89 0.746 21 0.70695 0.656 34 0.630 16 0.734 82 0.710 68 0.665 05 0.622 74 0.583 49 0.703 18 0.6768) 0.627 41 0 582 00 0.540 25 0.672 90 0.664 60 0.591 89 0.543 93 0.500 24 0.643 92 0.613 90 0.558 39 0.508 34 0.463 19 0.564 47 0.506 63 0.432 33 0.336 90 0.519 16 0.452 35 0.375 96 0.279 08 0.466 51 0.403 88 0.326 90 0.212 57 0.424 10 0.360 61 0.284 26 0.193 81 0.385 54 0.321 97 0.247 18 0.161 51 8 9 10 11 12 0.649 58 0.616 19 0.584 67 12 0.624 59 0.589 66 0.556 83 13 0.600 57 0.564 27 0.530 32 14 0.57747 0.53997 0.505 06 15 0.555 26 0.516 72 0.481 01 0.526 78 0.475 09 0.495 96 0.444 01 0.468 83 0.414 96 0.442 30 0.387 81 0.417 26 0.352 44 0.428 88 0.350 49 0.287 48 0.234 94 0.13459 0.397 11 0.338 6) 0.256 67 0.186 91 0.112 15 0.367 69 0.289 660.229 17 0.16253 0.09345 0.340 46 0.263 33 0.204 62 0.141 33 0.077 89 0.315 24 0.239 39 0.18270 0.122 89 0.066 91 16 0.533 90 0.494 46 0.458 11 0.393 66 0.338 73 0.291 29 0.217 63 0.163 12 0.106 860.056 09 26 17 0.513 37 0.473 17 0.436 29 0.371 36 0.316 570.270 26 0.197 84 0.14566 0.092 93 0.045 07 18 0.493 62 0.452 80 0.415 52 0.350 34 0.295 86 0.250 24 0.179 86 0.130 06 0.080 80 0.037 56 18 19 0.674 64 0.433 30 0.395 73 0.330 51 0.276 50 0.231 71 0.163 51 0.116 11 0.070 26 0.031 30 19 20 0.456 38 0.414 64 0.375 88 0311 80 0.258 41 0.216 54 0.148 66 0.103 57 0.051 10 0.025 0 20 21 0.438 83 0.395 78 0.358 94 0.296 15 0.26151 0.193 65 0.135 13 0.092 50 0.053 13 0.021 14 21 22 0.421 95 0.379 70 0.341 84 0.277 50 0.225 71 0.183 94 0.122 85 0.082 66 0.046 20 0.018 11 22 23 0.405 72 0.363 35 0.125 57 0.261 79 0.210 94 0.170 310.111 68 0.073 79 0.040 17 0.0150923 24 0.390 12 0.347 70 0.310 06 0.245 97 0.197 14 0.157 69 0.101 530.065 88 0.034 93 0.012 26 25 0.375 11 0.332 73 0.295 30 0.232 99 0.184 24 0.145 01 0.092 30 0.058 82 0.03038 0.010 48 25 30 0.308 31 0.267 00 0.231 37 0.174 11 0.131 36 0.00 37 0.057 31 0.033 38 0.025 100.004 21 30 35 0.253 41 0.214 25 0.181 29 0.130 160.093 66 0.067 63 0.035 58 0.018 94 0.00751 0.001 59 35 40 40 0.208 28 0.17192 0.142 04 0.097 220.066 78 0.046 03 0.022 09 0.01074 0.003 73 0.000 58 0.031 32 0.013 72 0.00510 0.001 850.000 27 45 45 0.171 19 0.13796 0.111 29 0.072 65 0.047 61 50 50 0.14071 0.110 70 0.087 20 0.054 28 0.033 96 0.021 37 0.008 52 0.00346 0.00092 0.000 11 60 0.095 06 0.07129 0.053 54 0.030 31 0.01726 0.009 88 0.003 28 0.00111 0.00023 0.000 02 60 Source: Table 1, Appendix, p. 986 Henderson, S., G. Peirson, K. Herbohn, T. Artiach and Howieson, B. 2017, issues in Financial Accounting (16 ed.). table 2 Present value of S1 per period continued 4.0% 4.5% 5.0% 6.0% 70% 8.0% 10.0" 12.09 15.05 20.0% 2 2 3 0.9615 1.8861 2.7751 3.6299 4.4518 1 2 0.9569 1.8727 2.7490 3.5875 0.9524 1.8594 2.7232 3.546 0 4.3295 0.9433 1.8333 2.6730 3.4651 4.2123 0.9365 1.805 2.0243 3.3872 4.1001 0.925 1.7832 2.5770 0.909 1 1.7355 2.4868 3.1698 3.7907 C.8929 0.8625 16901 16257 2.2832 3.037) 2.8549 2604 3.3521 0.3333 1.5278 2.106 2.5867 4 5 5 3.9927 6 5.2421 7 6.0021 8 6.7327 7.4353 10 8.1109 5.3579 5.8927 6.5959 7.2688 7.9127 5.0757 5.7864 6.4632 7.1078 7.7217 4,9173 5.5823 6.2007 6.8016 7.3600 4.7665 5.3892 5.9712 6.5152 7.0235 4.622 5.205) 5.7466 6.2460 6.7100 4.355 2 6.8684 5.3349 5.7590 6.1465 41114 3.784 43.3255 6 45638 6.1604 3.6066 2 4.4873 3.8372 8 5.3282 6.7715 4,0310 9 5.650 25.018 7 41925 10 11 8.760 5 12 9.385 1 13 9.9856 16 10.5631 15 11.1184 8.528 9.1186 9.682 10.222 8 10.7395 8.3064 8.8633 9.3936 9.8985 10.3797 7.8868 8.3838 8.8526 9.2949 9.7122 7.4986 7.9425 8.3576 8.7654 9.1079 7.536 0 7.9037 6.495 0 6.8136 7.100 7.3666 7.5000 5.9377 5.2337 41271 11 5.4205 4,439 2 12 5.5831 4.5327 13 6.5282 5.7266 4.610514 6.810 5.847) 4.6755 15 8.5594 18 11.6523 11.2340 17 12.1657 11.707 2 18 12.6593 12.1600 19 13.1339 12.5933 20 13.5903 13.0079 10.8378 11.2741 11.619 6 12.0853 12.4622 10.1058 10.4772 10.8276 11.1581 11.4699 9.4466 9.7612 10.0590 10.3355 10.5940 8.8513 9.1216 9.3718 9.5035 7.6237 8.0215 8.2014 8.3569 8.5185 6.9740 5.954247296 15 7.1196 47146 17 6.127 94812218 7.3658 6.1982 48435 19 13.4047 13.7844 14.1678 21 14.0292 22 16,4511 23 34.8568 24 15.247 25 15.6221 12.8212 13.163 0 13.4886 13.7986 7.6466 6.3580 11.7660 12.0415 12.303 12.5503 12.7833 10.8355 11.0612 11.2721 11.4693 11.6535 10.0368 10.2007 10.3710 10.5287 10.6747 8.6486 8.7715 2.882 8.0847 21 49096 22 4.985 23 4.9371 24 16.8282 78431 30 17.2920 16.283 15.3725 13.7648 12.4090 11.2577 8.0552 6565949789 30 35 18.6646 17.4610 16.374 2 14.4982 11.6565 8.1255 6.616 6 4.991 5 35 12.9676 13.3317 40 19.792 18.4016 17.1991 15.0462 11.9265 9.7790 2.2438 .6417 4.995640 45 20.7200 19.1563 17.7741 15.4558 13.6055 12.1084 8.225.6542 4998645 50 21.4822 19.7620 18.2559 15.7618 13.8007122336 9.9146 60 22.623 5 20.638 0 18.9203 8.3045 6.6605 4.99550 8.3240 6.505 14.9999 60 16.1616 14.0392 12.3766 9.9672 Source: Table 2, Appendix, pp. 987-988 Henderson, S., G. Peirson, K. Herbohn, T. Artiach and Howieson, B. 2017, Issues in Financial Accounting (16 ed.)