On 1 July 2017, Sherlock Ltd leased a processing plant to Holmes Ltd. The plant was purchased by Sherlock Ltd on 1 July 2017 for its fair value of $467,112. The lease agreement contained the following provisions.

Lease term	3 years
Economic life of plant	5 years
Annual rental payment, in arrears (commencing 30/6/2018)	$150,000
Residual value at end of the lease term	$90,000
Residual guaranteed by lessee	$60,000
Interest rate implicit in lease	7%
The lease is cancellable only with the permission of the lessor.

Holmes Ltd intends to return the processing plant to the lessor at the end of the lease term. The lease has been classified as a finance lease by both the lessee and the lessor.

1. (a) Prepare the lease payment schedule for the lessee.(Round factor values to 4 decimal places, e.g. 5,2752 and final answers to 0 decimal places, e.g. 5,275.)

Holmes Ltd (lessee) Lease payments schedule
Minimum lease payments $	Interest expense $	Liability reduction $	Liability balance $
1 July 2017
30 June 2018
30 June 2019
30 June 2020

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