Question 2 (12 marks): Lessee co and Lessor itd. Both follows IFRS Jan 1, 2020, they enter into a lease agreement that the lessee agreed to lease equipment for 7 years and to assume all costs and risks of ownership The lease effective Jan 1, 2020, and requires annual rental payments each January starting Jan 1, 2020 Lessee's incremental borrowing rate is 7%, and the implicit interest rate used by lessor itd is 7% and known to the lessen The equipment was purchased by lessor on this day Jan 1, 2020 for $1,095 047 paid cash by lessor Equipment useful life is 10 years and the estimated residual value is $32 500 guaranteed Lessee and Lessor depreciate similar equipment's using straight line method. At the end of the lease there is a bargain purchase option amount of $25 000 Collectability of lease payments is assured, also there is no assurance that the lessee will exercise the bargain purchase option At the end of the lease term losseo will return the equipment to lessor Lessee and Lessor year ond is Dec 31, of overy year Instructions: Assuming this is a Finance (capital). (Right for use asset) type lease for the Lessor and Lessee (Round all your calculation to neares! Calculate the minimum lease payment (MLP) that will be charged by the lesson Prepare the lessee Journal entries as of Jan 1, 2020 (show your calculation) Prepare the journal entries for the lessee as of Dec 31 2020 Prepare all the journal entries that the lessee will prepare for 2021