Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased theequipment from International Machines at a cost of $131,379.Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1)Related Information:Lease termQuarterly rental paymentsEconomic life of asset2years (8 quarterly periods)$ 17,0002at the beginning of each periodyears$ 131,379Implicit interest rate (Also4%Fair value of assetlessee's incremental borrowingrate)Required:Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1.2025. Edison's fiscal year ends December 31.Complete this question by entering your answers in the tabs below.AmortizationScheduleGeneralJournal

Effective interest = Previous lease balance * quarterly rate of interestDecrease in balance = Lease…

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $131,379. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Related Information: Lease term Quarterly rental payments Economic life of asset 2 years (8 quarterly periods) $ 17,000 at the beginning of each period 2 years $ 131,379 Implicit interest rate (Also 4% Fair value of asset lessee's incremental borrowing rate) Required: Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2025. Edison's fiscal year ends December 31.

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $131,379. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) Related Information: Lease term Quarterly rental payments Economic life of asset 2 years (8 quarterly periods) $ 17,000 at the beginning of each period 2 years $ 131,379 Implicit interest rate (Also 4% Fair value of asset lessee's incremental borrowing rate) Required: Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2025. Edison's fiscal year ends December 31.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased the
equipment from International Machines at a cost of $131,379.
Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1)
Related Information:
Lease term
Quarterly rental payments
Economic life of asset
2
years (8 quarterly periods)
$ 17,000
2
at the beginning of each period
years
$ 131,379
Implicit interest rate (Also
4%
Fair value of asset
lessee's incremental borrowing
rate)
Required:
Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1.
2025. Edison's fiscal year ends December 31.
Complete this question by entering your answers in the tabs below.
Amortization
Schedule
General
Journal

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Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $105,000. Manufacturers Southern's fiscal year ends December 31. (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 $17,000 at the beginning of each period Economic life of asset 2 years Fair value of asset $127,024 Implicit interest rate 8% Required:1. Show how International Machines determined the $17,000 quarterly lease payments.2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.
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