Southern Manufacturers leased high-tech electronic equipment from International Machines on January 1, 2018. International Machines manufactured the equipment at a cost of $96,000. Manufacturers Southern's fiscal year ends on December 31. ($1 FV, $1 PV, $1 FVA, $1 PVA, $1 FVAD, and $1 PVAD) (Use appropriate factors from the tables provided.)

Related information:
rental period	2 years (8 quarters)
Quarterly rental payments	$16,500 at the start of each term
economic life of the asset	2 years
fair value of the asset	$125,370
Implicit interest rate	%6

Required:
1. Show how International Machines determined quarterly lease payments of $16,500.
2. Prepare the appropriate entries for International Machines to post the lease on January 1, 2018, and the second lease payment on April 1, 2018.

A. Register the lease.

B. Record the money received. (1 January)

C. Record the money received. (1 April)

Answer rating: 100% (QA)

To determine the quarterly lease payments of 16500 we need to use the present value of an annuity du... View the full answer