On 1 July 2020, Pininfarina, an Italian automotive design service, acquired equipment under a four-year finance lease agreement from ABB Robotics.

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The equipment had a present value of $1,077,450. The equipment had an estimated useful life of six years. The implicit rate of interest on the equipment was 8% per annum. The lease involved four payments, three annual payments on 30 June each year of $304,000 and an additional final payment at the end of the lease of $400,000 on 30 June 2024. Pininfarina will return the equipment at the end of the lease to ABB Robotics. Required: a) Complete a lease schedule for the four years up to and including 30 June 2024. (4 marks) b) Record the General Journal entries relating to the lease in the first year ending 30 June 2021. Justify your treatment of the initial lease and depreciation (3 makrs) c) Prepare the Balance Sheet extract for Pininfarina as at 30 June 2021. (2 marks) The equipment had a present value of $1,077,450. The equipment had an estimated useful life of six years. The implicit rate of interest on the equipment was 8% per annum. The lease involved four payments, three annual payments on 30 June each year of $304,000 and an additional final payment at the end of the lease of $400,000 on 30 June 2024. Pininfarina will return the equipment at the end of the lease to ABB Robotics. Required: a) Complete a lease schedule for the four years up to and including 30 June 2024. (4 marks) b) Record the General Journal entries relating to the lease in the first year ending 30 June 2021. Justify your treatment of the initial lease and depreciation (3 makrs) c) Prepare the Balance Sheet extract for Pininfarina as at 30 June 2021. (2 marks)