Problem: In 1 July 2023, Foto-1 Ltd leased a photocopier from Zerox Ltd, a company that manufactures, retails and leases copiers. The photocopier had cost Zerox Ltd $20,000 to make. The lease agreement contained the following provisions: Lease term 4 years Initial payment upon signing of lease on 1 July 2023 $30,000 Annual payments payable on 30 June 2024, 2025, 2026 and 2027. $21,300 Economic life of the copier 5 years Residual value at the end of the lease term $3,000 Residual value guaranteed by lessee $1,500 Each of the four annual payments included an amount of $1,100 p.a. to reimburse Zerox Ltd for the cost of paper and toner provided to Foto-1 Ltd over the past year. Zerox Ltd's solicitor prepared the lease agreement for a fee of $450. The lease is cancellable only with the permission of the lessor. Foto Ltd intends to return the copier to Zerox Ltd at the end of the lease term.
Required: A. Prepare the lease receipts schedule for Zerox Ltd using the interest rate implicit in the lease of 10%. Show all workings and round off to the nearest dollar.