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Question - On July 1, 2005, Hawkeye Aviation leased two helicopters from Honeycutt aircraft for an initial period of 12 months with a provision of continuation on a month-to-month basis. The lease is properly classified as an operating lease. Lease payments are made as follows:
First two months $8000 per month
Second three months $10000 per month
Third three months $12000 per month
Last four months $15000 per month
After the first 12 months and thereafter $6000
Provide the entries to record the monthly lease payments for the first year on the books of Hawkeye Aviation properly recognizing monthly rent expense.
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