Gemini Ltd manufactures specialised machinery for both sale and lease. On 1 July 2019, Gemini Ltd leased one of these machines to Authentic Ltd, incurring $1,200 in costs to prepare and execute the lease document. Authentic Ltd incurred $650 in costs to negotiate the agreement. The machine being leased cost Gemini Ltd $40047 to manufacture. The machine is expected to have an economic life of 6 years, after which time it will have a residual value of $950. The lease agreement details are as follows.

* Length of lease: 5 years

* Commencement date: 1 July 2019

* Annual lease payment, payable 30 June each year commencing 30 June 2020: $15425

* Residual value at the end of the lease term: $8650

* Residual value fully guaranteed by Authentic Ltd: $6353

* Interest rate implicit in the lease: 7%

All insurance and maintenance costs are paid by Gemini Ltd and amount to $2728 per year and will be reimbursed by Authentic Ltd by being included in the annual lease payment of $15425. The machinery will be depreciated on a straight-line basis. It is expected that Authentic Ltd will return the machine to Gemini Ltd at the end of the lease.

What was the sales revenue recorded by Gemini Ltd at the inception of the lease on 1 July 2019?

Answer rating: 100% (QA)

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