Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2024. International Machines manufactured the equipment at a cost of $92,000. Manufacturers Southern's fiscal year ends December 31. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Related Information: Lease term Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate 2 $ 18,000 2 $ 134,496 8% years (8 quarterly periods) at the beginning of each period years Required: 1. Show how International Machines determined the $18,000 quarterly lease payments. 2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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JJ. 166.

Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2024. International
Machines manufactured the equipment at a cost of $92.000. Manufacturers Southern's fiscal year ends December 31.
Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1)
Related Information:
Lease term
Quarterly rental payments
Economic life of asset
Fair value of asset
Implicit interest rate
2
$ 18,000
$ 134,496
Required 1 Required 2
years (8 quarterly periods)
at the beginning of each period
2 years
8%
Required:
1. Show how International Machines determined the $18,000 quarterly lease payments.
2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second
lease payment on April 1, 2024.
PV factors based on
Table or Calculator function
PV of Loase
Complete this question by entering your answers in the tabs below.
Show how International Machines determined the $18,000 quarterly lease payments.
Note: Round your intermediate and final answers to the nearest whole dollar. Round your percentage answer to 1 decimal
place.
111
No
Transcribed Image Text:Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2024. International Machines manufactured the equipment at a cost of $92.000. Manufacturers Southern's fiscal year ends December 31. Note: Use tables, Excel, or a financial calculator. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Related Information: Lease term Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate 2 $ 18,000 $ 134,496 Required 1 Required 2 years (8 quarterly periods) at the beginning of each period 2 years 8% Required: 1. Show how International Machines determined the $18,000 quarterly lease payments. 2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024. PV factors based on Table or Calculator function PV of Loase Complete this question by entering your answers in the tabs below. Show how International Machines determined the $18,000 quarterly lease payments. Note: Round your intermediate and final answers to the nearest whole dollar. Round your percentage answer to 1 decimal place. 111 No
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