Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $136,768. (EV of $1, PV of $1, EVA of $1, PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease term Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate (Also lessee's incremental borrowing rate) 2 years (8 quarterly periods) $18,000 at the beginning of each period 2 years $136, 768 Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization is recorded at the end of each fiscal year (December 31) on a straight-line basis.
Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $136,768. (EV of $1, PV of $1, EVA of $1, PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease term Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate (Also lessee's incremental borrowing rate) 2 years (8 quarterly periods) $18,000 at the beginning of each period 2 years $136, 768 Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization is recorded at the end of each fiscal year (December 31) on a straight-line basis.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison
purchased the equipment from International Machines at a cost of $136,768. (EV of $1, PV of $1, FVA of $1, PVA of $1.
EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Related Information:
Lease term
Quarterly rental payments
Economic life of asset
Fair value of asset
Implicit interest
2 years (8 quarterly periods)
$18,000 at the beginning of each period
2 years
$136, 768
6%
(Also lessee's incremental borrowing rate)
Required:
Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the
lease through January 1, 2022. Amortization is recorded at the end of each fiscal year (December 31) on a straight-line
basis.
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