Question 3 Chilly Ltd leased a freezer (with a useful life of 6 years and a fair value of $5,027) from Freeze Ltd on 1 July 2014 for a period of 5 years (5 payments) through a non-cancellable lease. The lease payments of $1,300, including reimbursement of Freeze Ltd's executory costs of $300 per year, are made in arrears (at the end of each year). There is a guaranteed residual of $700 at the end of the lease term. The interest rate implicit in the lease is 4%. Required a Explain whether this is a finance or operating lease and why it is important to determine this. [4 marks] b According to the requirements of AASB 117, prepare general journal entries in the books of the lessee, Chilly Ltd for: i1 July 2014 ii30 June 2015 [7 marks] Narrations are not required. Round all calculations to the nearest dollar where necessary - show all your workings