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Please, help me, Problem 15-15 (Algo) Nonlease payments; lessor and lessee (LO15-2, 15-7] On January 1, 2021, Lesco Leasing leased equipment to Quality Services under
Please, help me,
Problem 15-15 (Algo) Nonlease payments; lessor and lessee (LO15-2, 15-7] On January 1, 2021, Lesco Leasing leased equipment to Quality 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: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) a. Ten annual payments of $59,000 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 Lesco was $321,104. 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. Lesco was to pay this cost as incurred, but lease payments reflect this expenditure. Also included in the $59,000 payments is an insurance premium of $4,000 providing coverage for the equipment. Required: 1. Prepare the appropriate entries for both the lessee and lessor related to the lease on January 1, 2021. 2. Prepare the appropriate entries for both the lessee and lessor related to the lease on December 31, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate entries for both the lessee and lessor related to the lease on January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) View transaction list Journal entry worksheet Record the beginning of the lease for Quality Services. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Lease receivable 321,104 Equipment 321,104 Record entry Clear entry View general journal Journal entry worksheet Record the lease and maintenance payment made by Quality. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Cash 59,000 Maintenance fee payable 5,000 54,000 Lease receivable Record entry Clear entry View general journal Journal entry worksheet Record the beginning of the lease for Lesco. Note: Enter debits before credits. Date General Journal Debit Credit January 01, 2021 Record entry Clear entry View general journal Journal entry worksheetStep by Step Solution
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