YOUR QUESTION IS WAY TOO HARD BUT HERES THE ANSWER:
a) Journal entry on 1 July 2022 in the books of Agrimachine Ltd:
Lease Receivable Dr. $80,000
To Lease Income Cr. $80,000
This entry records the initial recognition of the lease receivable for the Tractor leased to Au Farm Ltd.
b) Journal entry on 30 June 2023 in the books of Au Farm Ltd:
Lease Expense Dr. $12,000
To Cash Cr. $12,000
This entry records the lease expense paid by Au Farm Ltd to Agrimachine Ltd for the year ended 30 June 2023.
c) The exceptional conditions that lead to the lease assets and lease liability not being recognized and the lease contract being considered an operating lease include:
The lease term being equal to the estimated economic life of the leased asset.
The unguaranteed residual value not being significant.
The present value of lease payments not exceeding a substantial portion of the fair value of the leased asset.
These conditions indicate that the risks and rewards of ownership are not effectively transferred to the lessee, and the lease is more akin to a rental agreement. As a result, the lease is treated as an operating lease rather than a finance lease, and the lease assets and lease liability are not recognized on the balance sheet of the lessee.
Your Welcome <3
''Ahmed Mansur''