Please help me with the below question?
TLT Couriers Ltd is an Auckland based courier deliver company. The company has experienced rapid growth in recent years and the board of directors is considering expanding their fleet of vans. The CEO estimates that the company requires an additional five vans to meet the increase in demand for their services. The board has decided that it will purchase 3 vans and lease out the fourth from AoneFinance Ltd. The following information is available for the lease agreement:
Date of commencement of lease - 1/07/2016
Lease asset - Van
Lease term/duration (years) - 4
Economic life of machine (years) - 5
Initial up-front payment/deposit (1st July 2016) - $ 5,500
4 Lease payments due at the end of the year (30 June) - $ 8,000
Lease payment contains amount for insurance & maintenance - $ 500
Fair value of machine on 1st July 2016 - $ 30,329
Cost of machine - $ 12,000
Bargain purchase option (exercisable - 30 June 2020) - $ 750
Financial year end - 30-Jun
Depreciation method - SLM
Site preparation costs - $ 2,150
Legal fees incurred by lessee - $ 450
a. For the lessee:
i. Calculate the implicit rate of interest
ii. Calculate the cost of the right-of-use asset lease asset
iii. Provide a lease schedule clearly indicating payments, interest, principal and
outstanding lease liability.
iv. Provide the journal entries for recording the right-of-use asset lease asset and
the lease liability for the 1st of July 2016.
v. Provide the journal entries for annual lease payment for the financial year ended
30 June 2017.
vi. Calculate the annual depreciation expense.
vii. Provide snapshots of the Statement of Financial Position for the years relating to
the asset and the lease liability.
b. For the lessor:
i. Provide the journal entries for the 1st July 2016 if the lessor is a financial
institution and if the lessor is a manufacturer dealer.
ii. Provide the journal entries for receipt of the annual lease payment for the
financial year ended 30 June 2017.