QUESTION 1 PARTC AF Ltd has requested your help in preparing their financial statements as they are unsure of the new requirements of NZ IFRS 16 Leases for lessors. You are provided with the following lease details: AF Ltd is the: Lessor Commencement date 1 April 2019 Lease term 7 years Lease classification Operating Lease Upfront payment due on the commencement date $49 000 Fixed payments per annum received at year end $70 000 FV of underlying asset at commencement date 688 108 Economic life of the machine 8 years The depreciation method used by the lessor for the leased machine Straight line Note: AF Ltd sold the leased machine on 1 April 2026 for $90 000. Required: (1) Prepare financial statements for AF Ltd to reflect the effects of the operating lease for the financial periods ending 31 March 2020, 2022, 2024, 2026 and 2027. (ii) Why does the carrying amount of the PPE - Machine at 31/3/2026 not equal the depreciation expense amount for each of the previous seven years