Help Save& Exit Submit 10 Check my work Exercise 15-31 Nonlease payments; lessor and lessee [LO15-2, 15-7 On January 1, 2018, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 14% rate of return for providing long-term financing. The lease agreement specified: a. Ten annual paymen ts of $65,000 beginning January 1, 2018, the beginning of the lease and each December 31 thereafter through 2026. b. The estimated useful life of the leased equipment is 10 years with no residual value. Its c The lease qualifies as a finance lease/sales-type lease. d. A 10-yea service agreement with Quality Maintenance Company was negotiated to provide maintenance of the equipment as required. Payments of $4,500 per year are specifled, beginning January 1, 2018. NRC was to pay this cost as incurred, but lease payments reflect this expenditure. e. A partial amortization schedule, appropriate for both the lessee and lessor, follows: ELof $1. PyofS, EVAof$1, PVAofSI, AAD of$1 and PVADOS) (Use appropriate factor(s) from the tables provided.) Outstanding Balance Balance 1/1/2018 60,500 12/31/2018 60,5000.14 (299,255)41,896 12/31/2019 60,500 0.14 (280,651)-39,291 60,500 18,604 21,209 299,255 280,651 Required: 1. Prepare the appropriate entries for the lessee related to the lease on January 1, 2018 and December 31, 2018. 2. Prepare the appropriate entries for the lessor related to the lease on January 1, 2018 and December 31, 2018. Prey 8 of 10 Next >