On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 12% rate of return for providing long-term financing. The lease agreement specified the following: a. Ten annual payments of $55,000 beginning January 1, 2021, the beginning of the lease and each December 31 thereafter through 2029 b. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $316.412 c. The lease qualifies as a finance lease/sales-type lease. d. A 10-year service agreement with Quality Maintenance Company was negotiated to provide maintenance of the equipment as required. Payments of $5,000 per year are specified, beginning January 1, 2021. 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: (FV of $1. PV of $1, FVA of $I, PVA of $1. FVAD of $1 and PVAD of $1 (Use appropriate factor(s) from the tables provided.) Decrease in Balance Outstanding Balance Payments Effective Interest (12% * Outstanding balance) 1/1/2021 12/31/2021 12/31/2022 50,000 50,880 50,880 2.12 (266,412) - 31,969 @.12 (248,381) = 29,806 5e,eee 18,231 28,194 316,412 266,412 248, 381 228, 187 Required: 1. Prepare the appropriate entries for the lessee related to the lease on January 1, 2021 and December 31, 2021. 2 Prepare the appropriate entries for the lessor related to the lease on January 1, 2021 and December 31, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate entries for the lessee related to the lease on January 1, 2021 and December 31, 2021. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction Mat Journal entry worksheet View transaction llot Journal entry worksheet View transaction let Journal entry worksheet Record the cash payment, W Note: Enter debits before ore General Journal Date December 31, 2021 Debit Credit Record entry Clear entry Vlow general Journal Required 2 View transaction let Journal entry worksheet Record amortization of the right-of-use asset. Note: Enter debits before credits Date December 31, 2021 General Journal Debit Credit Record entry Clear entry View general Journal Required 2 > View transaction et Journal entry worksheet 1 2 3 Record lease by lesson Note: Enter debits before credits General Journal Date January 01, 2021 Debit Credit Record entry Clear entry View general Journal
