Twomatic Trucks Ltd. is a truck dealer who leases out trucks. During the financial year that ended on 28 February 2023, Twomatic Trucks Ltd leased out a truck to a customer for whom the truck was too expensive to buy.

Details regarding the truck:

The cash price of the truck (fair value) is R 825 000

The cost of the truck to Twomatic Trucks Ltd R 650 000

Details of the finance lease that commenced on 1 March 2022 are as follows:

Annual lease payment payable in arrears R190 900

Lease term is five years

The interest rate implicit in the lease is 9.50% p.a.

Unguaranteed residual value R150 025

Initial costs incurred in obtaining and setting up the lease paid on 1 March 2022 R7 000

The market rate of interest is 9.50% p.a. Twomatic Trucks Ltd received the lease payment due on 28 February 2023.

REQUIRED: Prepare the general journal entries required in the records of Twomatic Trucks Ltd to account for the lease for the year ending 28 February 2023. Just so you know, dates are required. Narrations can be ignored. Ignore all taxes. Show all workings. Round off to the nearest Rand. (25 marks)