High Time Tours leased rock-climbing equipment from Adventures Leasing on January 1, 2024. High Time has the option to renew the lease at the end of two years for an additional three years for $8,000 per quarter. Adventures purchased the equipment at a cost of $198,375.

Required:
1. Prepare appropriate entries for High Time Tours from the beginning of the lease through March 31, 2024. Appropriate adjusting entries are made quarterly.
2. Prepare an amortization schedule for the term of the lease.

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Related Information: Lease term Lease renewal option for an additional Quarterly lease payments Economic life of asset Interest rate charged by the lessor 2 years (8 quarterly periods) 3 years at $8,000 per quarter $15,000 on Jan. 1, 2024, and on Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter 5 years 8%