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On july 1, 2014, Radar aviation leased two planes from Potter Aircraft for an initial period of 12 months with the provision for a continuation on a month to month basis. the lease is properly classified as an operating lease. lease payments are to be made as follows.

First two months $16,000 per month

Second three months $14,000 per month

Third three months $10,000 per month

last 4 months $8,000 per month

After the first year, the rent continues at $6,000 per month. Provide the entries required to record the lease payments for the first year on the books of:

1) Radar Aviation
2) Potter Aircraft

Accounting Basics, Accounting

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  • Reference No.:- M939153

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