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Hulk Ltd (Lessor) and Vision Ltd (Lessee) enter into a lease agreement for a crane on 30 June 2019. On that date, the crane had a fair value of $55,904.

Details of the lease agreement are as follows:

Lease term	4 years
Annual Rental Payment in arrears starting from 30 June 2020	$15,000
Economic life of the Crane	6 years
Estimated Residual value at the end of the lease term	$20,000
Residual Value guaranteed by the lessee	$15,000
Interest Rate implicit in the lease	7%

The annual rental payment includes $3,000 that is reimbursed to the lessor to do the maintenance and insurance for the crane on behalf the lessee. The lessee intends to return the crane to the lessor at the end of the lease term.

The lease receipts schedule for the lessor is shown below:

Date	Lease Receipts	Interest Revenue	Receivable Reduction	Receivable Balance
30-Jun-19				$55,904
30-Jun-20	$12,000	$3,913	$8,087	$47,817
30-Jun-21	$12,000	$3,347	$8,653	$39,164
30-Jun-22	$12,000	$2,742	$9,258	$29,906
30-Jun-23	$32,000	$2,094	$29,906	$0

Required:

Based on the above lease receipts schedule, prepare journal entries in the books of the lessor from the start of the lease until the year ended 30 June 2022. (10 Marks)

Narrations are NOT required.

Australian Standards

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