Please assist in wrong answers:
On January 1, 2021, 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: a. Ten annual payments of $72,000 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 $432,577. 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 $8,000 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 $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use approprlate factor(s) from the tables provided.) Decrease in Balance Outstanding Balance Payments Effective Interest (10% * Outstanding balance) 1/1/2021 12/31/2021 12/31/2022 64,000 64,000 64, eee 0.1 (368,577) = 36,858 0.1 (341, 435) = 34,144 64,888 27,142 29,856 432,577 368,577 341,435 311,579 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. Required 1 Required 2 Prepare the appropriate entries for the lessee related to the lease on January 1, 2021 and December 31, 2021. (Round intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, selec journal entry required" in the first account field.) No General Journal Debit Credit 1 Date January 01, 2021 Right-of-use asset Lease payable 432,577 432,577 2 January 01, 2021 Lease payable 64,000 Cash X 64,000 3 December 31, 202 Lease payable Interest expense Cash 36,858 X 27,142 x 64,000 4 43,258 December 31, 204 Amortization expense Right-of-use asset 43,258 Required 1 Required 2 Prepare the appropriate entries for the lessor related to the lease on January 1, 2021 and December 31, 2021. (Roun intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, se journal entry required in the first account field.) No General Journal Debit Credit 1 Date January 01, 2021 Lease receivable Sales revenue 432,577 432,577 2 64,000 January 01, 2021 Cash Lease receivable O 64,000 3 64,000 December 31, 202 Cash Interest expense Lease receivable 27,142 36,858
