Lessee Ltd has requested your help in preparing their financial statements as they are unsure of the new requirements of NZ IFRS 16 Leases for lessees.

The lease details have been provided below:

C. commencement date	1 April 2019
upfront payment due on the commencement date	$30 000
lease term	3 years
fixed payments per annum at year end	$100 000
IDC incurred by the lessee	$ 806
ourchase option Lessee Ltd is reasonably certain it will exercise the option	$50 000
lessee;s incremental borrowing rate	6%
economic life of asset	5 years
depreciation method used by the lessee	Straight line
the relevant present value discount factors are:
presnent value of $1 in n periods n = 3 i = 6%	0.8396
present value of an annuity n = 3 i = 6%	2.6730

Required:

(i) Prepare the journal entry to initially recognise the ROU asset on the commencement date. Show your workings.

(ii) Complete the table in the answer booklet.

(iii) Prepare financial statements, over the lease period, to reflect the effects of the lease. Lessee Ltd classifies interest expense paid as a cash flow from operating activities.

(iv) Prepare all the necessary journal entries, in relation to the lease, on 31 March 2022.