Gold Ltd manufactures specialised moulding machinery for both sale and lease. On 1 July 2022, Gold...

  

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Gold Ltd manufactures specialised moulding machinery for both sale and lease. On 1 July 2022, Gold Ltd leased a machine to Silver Ltd, incurring $2200 in costs to prepare and execute the lease document. The machine being leased cost Gold Ltd $220 000 to make and its fair value at 1 July 2022 is considered to be $251 990. The terms of the lease agreement are as follows. Lease term commencing on 1 July 2022 Annual lease payment commencing on 1 July 2023 Estimated useful life of machine (scrap value $0) Estimated residual value of machine at end of lease term Residual value guarantee by Silver Ltd Interest rate implicit in the lease The lease is classified as a finance lease by Gold Ltd. 5 years $72000 8 years $9.000 $5000 10% The annual lease payment includes an amount of $7000 to cover annual maintenance and insurance costs. Actual executory costs for each of the 5 years were as follows. 2022-23 $7400 2023-24 7900 2024-25 7700 2025-26 7300 2026-27 7200 Silver Ltd may cancel the lease but will incur a penalty equivalent to 2 years' payments if it does so. Silver Ltd intends to lease a new machine at the end of the lease term. The end of the reporting period for both companies is 30 June. Required 1. Prepare a schedule of lease payments for Silver Ltd. 2. Prepare the general journal entries to record the lease transactions for the year ended 30 June 2023 in the records of Silver Ltd. 3. Prepare a schedule of lease receipts for Gold Ltd. 4. Prepare the general journal entries to record the lease transactions for the year ended 30 June 2023 in the records of Gold Ltd. Gold Ltd manufactures specialised moulding machinery for both sale and lease. On 1 July 2022, Gold Ltd leased a machine to Silver Ltd, incurring $2200 in costs to prepare and execute the lease document. The machine being leased cost Gold Ltd $220 000 to make and its fair value at 1 July 2022 is considered to be $251 990. The terms of the lease agreement are as follows. Lease term commencing on 1 July 2022 Annual lease payment commencing on 1 July 2023 Estimated useful life of machine (scrap value $0) Estimated residual value of machine at end of lease term Residual value guarantee by Silver Ltd Interest rate implicit in the lease The lease is classified as a finance lease by Gold Ltd. 5 years $72000 8 years $9.000 $5000 10% The annual lease payment includes an amount of $7000 to cover annual maintenance and insurance costs. Actual executory costs for each of the 5 years were as follows. 2022-23 $7400 2023-24 7900 2024-25 7700 2025-26 7300 2026-27 7200 Silver Ltd may cancel the lease but will incur a penalty equivalent to 2 years' payments if it does so. Silver Ltd intends to lease a new machine at the end of the lease term. The end of the reporting period for both companies is 30 June. Required 1. Prepare a schedule of lease payments for Silver Ltd. 2. Prepare the general journal entries to record the lease transactions for the year ended 30 June 2023 in the records of Silver Ltd. 3. Prepare a schedule of lease receipts for Gold Ltd. 4. Prepare the general journal entries to record the lease transactions for the year ended 30 June 2023 in the records of Gold Ltd.