Pennywise (Pty) Ltd (Pennywise), a manufacturer of high-end jewellery was incorporated on 1 July 2021. The following lease agreements were entered into: Lease agreement 1: On 1 July 2021 manufacturing activities commenced on the leased premises (which consists of land with a factory building). This is also the commencement date of the lease. The annual instalments total R198 000 per year (15% VAT included) for five years. The estimated useful life of the premises is 30 years. There is no reasonable certainty relating to the renewal of this lease contract. The correctly calculated present value of the future cash flows on 1 July 2021 is R633 470 calculated at the implicit interest rate of 17%.
a) Journalise the necessary entries to account for lease agreement 1 (land and bulidings) and lease agreement 2 (machine) in the general journal of Pennywise (Pty) Ltd for the reporting period ended 30 June 2022.