Chapter 15 Pre-Built Problems Saved On January 1, 2018, NRC Credit Corporation leased equipment to Brand 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 10 points a. Ten annual payments of $57,000 beginning January 1, 2018, the beginning of the lease and each December 31 thereafter through 2026 b. The estimated useful life of the leased equipment is 10 years with no residual value. Its cost to NRC was $303,265 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 Skipped required. Payments of $6,000 per year are specified, beginning January 1, 2018. NRC was to pay this cost as incurred, but lease payments reflect this expenditure eBook Print References 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 appropriate factor(s) from the tables provided.) Decrease in Balance Outstanding Balance Payments Effective Interest (14% Out3tanding balance) 1/1/2018 51,000 12/31/2018 51,000 0.14 (252,265)35, 317 12/31/2019 51,000 0.14 (236, 582)-33,121 51,000 15, 683 17,879 303,265 252, 265 236, 582 218,703 Required 1. Prepare the appropriate entries for the lessee related to the lease on January 1, 2018 and December 31, 2018 2. Prepare the appropriate entries for the lessor related to the lease on January 1, 2018 and December 31, 2018