Question 2: Leases (8 marks - 16 minutes) Lesla Ltd ('Lesla') operates a successful electric motor vehicle dealership. Lesla manufactures a wide range of electric motor vehicles at the Electro manufacturing plant and sells the electric motor vehicles on their online platform to its customers. Lesla also provides financing options to its clients which includes buying an electric motor vehicle on a finance lease. The University of New Zealand recently bought a fleet of electric motor vehicles on a finance lease. Electric vehicles are intended to be used as company cars by certain eligible persons in top management Details of the transaction are as follow: Lease period 5 years Lease commencement date 1 January 2020 Lease payment (per year for the whole fleet) $100,000 The useful life of each electric vehicle 10 years The interest rate implicit to the lease 5% Depreciation method Straight-line over the useful life Residual value guarantee (for the whole $150,000 fleet) Other information The ownership of the fleet of electric motor vehicles will NOT transfer to the University at the end of the lease term in 2024. After 5 years the University will return the fleet of electric motor vehicles to Lesla, The first lease payment is due on 31 December 2020 The financial year-end of the University is 31 December 2020 Required: Prepare the relevant journal entries for the University of New Zealand to account for the lease agreement for the financial year ending 31 December 2020 on the following assumptions: The present value of the minimum lease payments is $432,948 on 1 January 2020