Question 1 (6 marks) Willow Ltd. (Willow) is a flower shop located in Vancouver that creates floral arrangements for social events. Willow entered into a lease for a delivery truck for three years at 0% interest. Monthly lease payments are $1,100, paid at the beginning of each month. At the end of the lease term, Willow has the option to purchase the truck at a cost of $35,000 (which is the estimated fair market value at the end of the lease term). It would have cost Willow $75,000 to purchase a new truck at the inception date of the lease. Willow's management team preferred a lease at that time, but plans to purchase the truck at the end of the lease term because it should last an additional eight years. Willow reports in accordance with ASPE. Required: Using the relevant CPA Canada Handbook criteria, evaluate the nature of the lease and how it should be accounted for in Willow's financial statements. Include any calculations required to evaluate the lease. NO journal entries are required. (6 marks)