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"ill, Metro by TMobile \"\"533" 10:37 PM 4 [4' ' eztomheducationcom 2 . Award: 25.00 points On January 1, 2021, National Insulation Corporation (NIC) leased equipment from United Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee of a residual value by NIC. Portions of the United Leasing's lease amortization schedule appear below: (EV 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.) Effective Decrease in Outstanding Jan. 1 .Paments Interest Balance. Balance 2021 230.001 2021 18.000 13.000 192,001 2022 13.000 13.440 4.560 187.441 2023 18.000 13,121 4.879 182,552 2024 13.000 12.779 5.221 177.341 2025 18.000 12,414 5,586 171,755 2026 18.000 12 .023 5.977 165.773 2038 18.000 4.538 13.462 51.371 2039 18.000 3,596 14.404 36.967 2040 18.000 2.588 15.412 21.555 2041 23.064 1.509 21.555 0 Requ I re d : 1. What is the lease term in years? 2. What is the asset's residual value expected at the end of the lease term? (Round your answers to nearest whole dollar.) 3. What is the effective annual interest rate? (Round your percentage answer to 1 decimal place.) 4. What is the total amount of lease payments for United? (Round your answers to nearest whole dollar.) 5. What is the total amount of lease payments for NIC? (Round your answers to nearest whole dollar.) 6. What is United's net investment at the beginning of the lease (after the rst payment)? (Round your answers to nearest whole dollar.) 7. What is United's total effective interest revenue recorded over the term of the lease? (Round your answers to nearest whole dollar.) 8. What amount would NIC record as a right-ofuse asset at the beginning of the lease? (Round your answers to nearest whole dollar.) . - . _- - _- . - . Lease payments for NIC . Net investment I . Total effective interest revenue _ Rightol-use asset all Metro by T-Mobile - 10:37 PM AA a ezto.mheducation.com connect cancel print 1. Award: 25.00 points Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $2,710,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (FV of $1, PV of $1, EVA 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 $191,737-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 16% rate Fair value of asset $2,710,000 Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31). 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $2.3 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. Complete this question by entering your answers in the tabs below. Required Required 2 Required 2 Lessee Lessor Required 3 How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? Mid-South Urologists Group Physicians' Leasing