Question: On I July 2020, Harry Ltd leased a crane from Potter Ltd. The crane cost Potter Ltd $1203 considered to be its fair value

On I July 2020, Harry Ltd leased a crane from Potter Ltd.

On I July 2020, Harry Ltd leased a crane from Potter Ltd. The crane cost Potter Ltd $1203 considered to be its fair value on that same day. The finance lease agreement contained following provisions. 1 July 2020 The lease term is for 3 years, starting on The lease is cancellable, but only with the permission from the lessor. Annual lease payment, payable on 30 June each year Estimated useful life of crane Estimated residual value of crane at end of lease term Residual value guarantee by Harry Ltd Interest rate implicit in the lease $39000 4 yean $22000 $16000 7% Required 1. Prepare the lease schedules for Harry Ltd and Potter Ltd. 2. Prepare the journal entries in the records of Harry Ltd for the year ended 30 June 2021.

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