The following information is available for a noncancelable lease of equipment that is classified as a sales-type lease by the lessor and as a capital lease by the lessee. Assume that the lease payments are made at the beginning of each month, interest and straight-line depreciation are recognized at the end of each month, and the residual value of the leased asset is zero at the end of a 3-year life.

Cost of equipment to lessor - $50,000; initial payment by lessee at inception of lease - $2,000

Present value of remaining 35 payments of $2,000 each discounted at 1% per month -$58,817

A) For the lessor, record the lease (including the initial receipt of $2,000) and the receipt of the second installment of $2,000

B) For the lessee, record the lease (including the inital receipt of $2,000), the receipt of the second installment of $2,000, and the monthly depreciation.