File Home Insert Draw Design Layout References Mailings Review View Help Grammarly O Search Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,590,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) Lease Description: Quarterly lease payments 95, 333-beginning of each period Lease term 5 years (20 quarters) No residual value; no purchase option Economic life of lithotripter 5 years Implicit interest rate and lessee's incremental borrowing rate 8% Fair value of asset $1, 590, 000 Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? Finance lease / Operating Lease / Sales-type lease / Sub-Lease 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing. from the beginning of the lease Jan 01, 2021, through the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31). Lessee . . Record lease on Jan 01, 2021 Record cash payment Jan 01, 2021 Record cash payment April 01, 2021 Lessor Record lease on Jan 01, 2021 Record cash payment Jan 01, 2021 Record cash payment April 01, 2021 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $1.4 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. Record Lease Jan 01, 2021 Record Cash Received Jan 01, 2021 Record Cash Received April 01, 2021 Page 1 of 2 569 words + 91% 2:39 PM 3/3/2020