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