On January $1,2024,$ NRC Credit Corporation leased equipment to Brand Services under a finance$/$sales$-$type lease designed to earn NRC a $10\%$ rate of return for providing long$-$term financing. The lease agreement specified the following:

Ten annual payments of $$60,000$ beginning January $1,2024,$ the beginning of the lease and each December $31$ thereafter through $2032.$

The estimated useful life of the leased equipment is $10$ years with no residual value. Its cost to NRC was $$354,849.$

The lease qualifies as a finance lease$/$sales$-$type lease.

A $10-$year service agreement with Quality Maintenance Company was negotiated to provide maintenance of the equipment as required. Payments of $$7,500$ per year are specified, beginning January $1,2024.$ NRC was to pay this cost as incurred, but lease payments reflect this expenditure.

A partial amortization schedule, appropriate for both the lessee and lessor, follows:

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Payments Effective Interest $(10\%\backslash$times Outstanding balance$)$ Decrease in Balance Outstanding Balance

$354,849$

$1/1/202452,50052,500302,349$

$12/31/202452,5000\mathrm{.}1(302,349)=30,23522,265280,084$

$12/31/202552,5000\mathrm{.}1(280,084)=28,00824,492255,592$

Required:

Prepare the appropriate entries for the lessee related to the lease on January $1,2024$ and December $31,2024.$

Prepare the appropriate entries for the lessor related to the lease on January $1,2024$ and December $31,2024.$