On January 1, 2021, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease...

 

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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 folowing a. Ten annual payments of $75.000 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 $442,716. 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 $9,500 per year are specified, beginning January 1, 2021. NRC was to pay this cost as incurred, but lease payments reflect this expenditure. e. A partiai amortization schedule, appropriate for both the lessee and lessor, follows: EV 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.) Decrease in Balance Outstanding Balance Paymanta Effective Intareat (10t x Outstanding balance) 1/1/2021 12/31/2021 12/31/2022 65,500 65,500 65,500 0.1 (377,216) - 37,722 0.1 (349,438) 65,500 27,778 30,556 442,716 377,216 349, 438 318,882 34,944 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 lessor 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 joumal entry required" in the first account field.) View transaction llst Journal entry worksheet 2 3 > Record lease by lessor (include maintenance fee accrual). Note: Enter drbits before credits. 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 folowing a. Ten annual payments of $75.000 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 $442,716. 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 $9,500 per year are specified, beginning January 1, 2021. NRC was to pay this cost as incurred, but lease payments reflect this expenditure. e. A partiai amortization schedule, appropriate for both the lessee and lessor, follows: EV 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.) Decrease in Balance Outstanding Balance Paymanta Effective Intareat (10t x Outstanding balance) 1/1/2021 12/31/2021 12/31/2022 65,500 65,500 65,500 0.1 (377,216) - 37,722 0.1 (349,438) 65,500 27,778 30,556 442,716 377,216 349, 438 318,882 34,944 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 lessor 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 joumal entry required" in the first account field.) View transaction llst Journal entry worksheet 2 3 > Record lease by lessor (include maintenance fee accrual). Note: Enter drbits before credits.