Exercise 21-12 On January 1, 2017, Monty Co. leased a building to Flounder Inc. The relevant information related to the lease is as follows. 1. The lease arrangement is for 10 years. 2. The leased building cost $4,805,000 and was purchased for cash on January 1, 2017. 3. The building is depreciated on a straight-line basis. Its estimated economic life is 50 years with no salvage value. 4. Lease payments are $267,700 per year and are made at the end of the year. 5. Property tax expense of $79,600 and insurance expense of $10,800 on the building were incurred by Monty in the first year. Payment on these two items was made at the end of the year. 6. Both the lessor and the lessee are on a calendar-year basis. (a) Prepare the journal entries that Monty Co. should make in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit (To record receipt of lease payment.) (To record depreciation.) (To record insurance and property tax.)(b) Prepare the journal entries that Flounder Inc. should make in 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit 12/31/17 (c) If Monty paid $31,800 to a real estate broker on January 1, 2017, as a fee for finding the lessee, how much should Monty Co. report as an expense for this item in 2017? Expense should be reported SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR EXERCISE