Question 1On 1 July 2012, Bird Ltd entered into a lease arrangement for the lease of equipmentfrom N

Question 1On 1 July 2012, Bird Ltd entered into a lease arrangement for the lease of equipmentfrom Nest Ltd. The equipment had a fair value of $115 000 on 1 July 2012. Theequipment had a useful life of 6 years, and both companies used straight-linedepreciation. The lease is a finance lease. The following information relates to thelease arrangement:l The lease term is 5 years, with the equipment being returned at the end of this term.Annual lease payments of $33 000 are made on 30 June of each year, the first being made on the 30 June 2013. The annual lease payment includes an amount of $3 000 to cover annual maintenance.The estimated residual value of the equipment at the end of the lease term is $9 000, while Bird Ltd only guarantees $5 000 of the residual value.With an implicit interest rate of 10%, the present value of an annuity of$1, for 5 payments, is 3.7098, and the present value of a $1 in 5 years time is 0.6209.Required:a) Calculate the present value of minimum lease payments for Bird Ltd (round to the nearest dollar, show all working out).b) Prepare the journal entry(s) to record the lease in the books of Bird Ltd for 1 July 2012.c) Calculate annual depreciation on the leased equipment that Bird Ltd will have to record (round to the nearest dollar, show all working out).