(AASB 16 Leases will be applys) x Pty Ltd signed a three-year lease at $6,000 per month (GST-exclusive commencing 1 September 2021) for the premises at 26 Lancaster Road, Toowong.

A 2.5% annual rent increase is to take effect on 1 September each year. There is an option in the lease agreement to renew the lease for an additional three years at the expiration of the current lease and in perpetuity thereafter.

For the year ended 30 June 2022, the company made ten (10) monthly lease payments totalling $60,000 (GST-exclusive). Melissa has coded these payments to "rent expense" in the MYOB Profit and Loss Statement.

Being a bookkeeper, Melissa did not know how to apply the principles contained in the leasing standard, AASB 16 Leases.

She requests that you put through the appropriate journal entries to record the "right-of-use asset" and corresponding lease liability at 30 June 2022 and to also adjust the figures in the Profit and Loss Statement.

The following information is relevant for you to calculate the "right-of-use" asset and lease liability as per AASB 16 Leases:

First monthly lease payment (made in advance) 1 September 2021 Monthly lease payments for first 12 months (GST-exclusive) $6,000.00 Monthly lease payments for second 12 months (GST-exclusive) * $6,150.00 Monthly lease payments for third 12 months (GST-exclusive) ** $6,303.75 Total undiscounted lease payments over 3-year period $221,445 Present value of the lease payments $208,904.70 Period of the lease (3 years) 36 months Depreciation method straight-line Rent increase to take effect on 1 September each year 2.5% Annual discount rate to be used for the 36 monthly lease payments 4.00%

* calculated at $6,000 x 2.5% increase (for the period 1 September 2022 to 31 August 2023) ** calculated at $6,150 x 2.5% increase (for the period 1 September 2023 to 31 August 2024)

As noted above, the first monthly lease payment of $6,000 made on 1 September 2021 was made in advance. Hence, there was no interest in respect of the first lease payment.

Note: There are 303 days from 1 September 2021 to 30 June 2022.

Additional Information Relating to the Lease:

Being a new business, assume that there is no "reasonable certainty" at the inception of the lease (ie, 1 September 2021) that ltd will exercise the option to extend the lease term for an additional three years at the end of the original lease, which is due to expire on 31 August 2024. Hence, for the purposes of the leased (ROU) premises under AASB 16, assume that the right-of-use asset will be depreciated over three (3) years. Assume that there were no initial direct costs incurred in drafting and signing the lease agreement. These costs were borne by the lessor, and not the lessee. Finally, assume that there were no lease incentives received, nor any 'make good provision' (ie. no costs are estimated to be incurred at the end of the three years to restore the leased premises to its original condition). show the journal entries and create the lease repayment schedule,, interest, depreciation and closing balance using an excel sheet showing the calculations