Joplin Ltd Entered into a Lease Agreement on 1 July

Joplin Ltd entered into a lease agreement on 1 July 2002 with Thomas Ltd. The terms of the lease are as follows:

The interest rate implicit in the lease is 6 per cent and the fair value of the leased asset at the inception of the lease is $20,517. The lease is non-cancellable and at the end of the lease the asset is returned to the lessor. The economic benefits provided by the lease asset are expected to be consumed evenly over its life. What is the value of the lease asset and lease liability in the books of the lessee after adjusting entries made on 30 June 2003?

A) Lease asset: $17,908 Lease liability: $18,064
B) Lease asset: $21,352 Lease liability: $21,954
C) Lease asset: $18,465 Lease liability: $18,188
D) Lease asset: $17,460 Lease liability: $17,004
E) None of the given answers.