I am currently writing a narrative featuring many young children. Some of the children are under the age of five, and I'm wondering what the best way to write dialogue for their age group would be. I know that when they're young, they have trouble pronouncing certain consonants and consonant blends, like "l", "r", "v" and "th." When writing dialogue, would we express their mispronunciations and treat it like a dialect? 

Example: 
> "*Homewess*?" Three-year-old Billy asks. "What does *dat* mean?" 

> "It means we *haveta wiv* in a box," four-year-old Flora answers. 

> "*Wiv* in a box?" Billy cries with wide eyes. "I *wike* *wiving* here!" 

or 

>  "Homeless?" Three-year-old Billy asks. "What does that mean?" 

> "It means we have to live in a box," four-year-old Flora answers. 

> "Live in a box?" Billy cries with wide eyes. "I like living here!" 

Is it best to leave it to the reader's imagination, or to actually transcribe what their saying?