Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $117,772. (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.)

Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $117,772. (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.)

Related Information:
Lease term	2 years (8 quarterly periods)
Quarterly rental payments	$15,500 at the beginning of each period
Economic life of asset	2 years
Fair value of asset	$117,772
Implicit interest rate	6%
(Also lessee’s incremental borrowing rate)

Required:
Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2019. Depreciation is recorded at the end of each fiscal year (December 31) on a straight-line basis.

Required:
Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2019. Depreciation is recorded at the end of each fiscal year (December 31) on a straight-line basis.

No	Date	General Journal	Debit	Credit
1	January 01, 2018	Equipmentselected answer incorrect	117,772selected answer correct	not attempted
		Lease payableselected answer correct	not attempted	117,772selected answer correct
2	January 01, 2018	Lease expenseselected answer incorrect	15,500selected answer correct	not attempted
		Cashselected answer correct	not attempted	15,500selected answer correct
3	April 01, 2018	Lease expenseselected answer incorrect	14,175selected answer incorrect	not attempted
		Interest expenseselected answer correct	1,112selected answer incorrect	not attempted
		Cashselected answer correct	not attempted	15,500selected answer correct
4	July 01, 2018	Lease expenseselected answer incorrect	15,045selected answer incorrect	not attempted
		Interest expenseselected answer correct	455selected answer incorrect	not attempted
		Cashselected answer correct	not attempted	15,500selected answer correct
5	October 01, 2018	No journal entry requiredselected answer incorrect	not attempted	not attempted
6	December 31, 2018	Depreciation expenseselected answer incorrect	58,886selected answer incorrect	not attempted
		Equipmentselected answer incorrect	not attempted	58,886selected answer incorrect
7	December 31, 2018	No Transaction Recorded

Answer rating: 100% (QA)

To prepare the lease amortization schedule and appropriate entries for Manufacturers Southern from t... View the full answer