Orica Ltd acquired an item of equipment and enters eto a nov Smart Equipment Ltd on 1 January 2015. The lease consists of the folloing ncelleble lease agpe Date of inception: Duration of lease: 1/1/15 4 years 5 years $160,000 (annual) which includes 520,000 for maintenance and insucance costs per annu Life of leased asset: Lease payments (annuall): Guaranteed residual value (Added to final payment): $60,000 Interest rate 10% Required: (a) Determine the present value of minimum lease rental payment (2marks (b) Prepare the journal entries for the Lesses using the Net Method for the mark Transfer of control Payment of annual payments for 2015 and 2016 (c) How will the lease be shown in the financial statement of lessee at the end of 2016? (d) What exemptions are available under AASB 16 that would allow a lessee not to assets and lease liabilities? (2 marks) ease (e) Provide an overview of how accounting for leases was changed as result of the release of AASB16 Leases. (3 marks)

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