(Answered) Refer to the lease agreement described in the previous

Accounting

Refer to the lease agreement described in the previous exercise. Assume the contract specified that NRC (the lessor) was to pay, not only the $5,000 maintenance fees, but also insurance of $700 per year, and was to receive a $250 management fee for facilitating service and paying executory costs. The lessee's lease payments were increased to include an amount sufficient to reimburse executory costs plus NRC's fee.

Required:

Prepare the appropriate entries for both the lessee and lessor to record the second lease payment, executory costs, and depreciation (straight line) on December 31, 2011.

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