"Zhang Limited leases a helicopter from Tranter Limited with the following terms: lease term is 10 years; estimated economic life of the leased asset is 25 years; 10 annual rental payments of $900 000 are payable at the end of each year, the $900 000 payment includes service and maintenance costs of $100 000; residual value is $50 000; the guaranteed residual value by the lessee at the end of the lease term is $40 000; interest rate implicit in the lease is 5%. The journal entry format for the lessee at the end of the first year includes:"

		"Dr Lease expense 800 000, Dr Executory costs 100 000, Cr Bank 900 000"
		"Dr Lease expense 900 000, Cr Bank 900 000"
		"Dr Lease Liability (800 000 - y), Dr Interest Expense (y), Cr Bank 800 000"
		"Dr Lease Liability (900 000 - x), Dr Interest Expense (x), Cr Bank 900 000"

"Zhang Limited leases a helicopter from Tranter Limited with the following terms: lease term is 10 years; estimated economic life of the leased asset is 25 years; 10 annual rental payments of $900 000 are payable at the end of each year, the $900 000 payment includes service and maintenance costs of $100 000; residual value is $50 000; the guaranteed residual value by the lessee at the end of the lease term is $40 000; interest rate implicit in the lease is 5%. The lease is classified as a finance lease. Which of the following is correct:"

		The initial lease receivable balance in the lessor s lease receipts schedule will differ from the initial lease liability balance in the lessee s lease payments schedule because the residual amount is greater than zero.
		The initial lease receivable balance in the lessor s lease receipts schedule will differ from the initial lease liability balance in the lessee s lease payments schedule because there is an unguaranteed residual amount.
		The initial lease receivable balance in the lessor s lease receipts schedule will equal the initial lease liability balance in the lessee s lease payments schedule.
		All are correct.