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Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) Lease Description: Quarterly lease payments Lease term $123,990-beginning of each period 5 years (20 quarters) No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset 5 years $1,900,000 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 $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021.

Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) Lease Description: Quarterly lease payments Lease term $123,990-beginning of each period 5 years (20 quarters) No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset 5 years $1,900,000 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 $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset 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 $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. Required 1 Complete this question by entering your answers in the tabs below. Required 2 Lessee View transaction list 1 Record lease. $123,990-beginning of each period 5 years (20 quarters) Required 2 Lessor 2 Record cash payment. 3 Record cash payment. 5 years 12% $1,900,000 Required 3 Prepare appropriate entries for Mid-South Urologists Group 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). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.) X > Show less
Transcribed Image Text:Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset 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 $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. Required 1 Complete this question by entering your answers in the tabs below. Required 2 Lessee View transaction list 1 Record lease. $123,990-beginning of each period 5 years (20 quarters) Required 2 Lessor 2 Record cash payment. 3 Record cash payment. 5 years 12% $1,900,000 Required 3 Prepare appropriate entries for Mid-South Urologists Group 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). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.) X > Show less
Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead o Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-S $1. PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset Required 1 Complete this question by entering your answers in the tabs below. Required 2 Lessee View transaction list Required: 1. How should this lease be classified by Mid-South Urologists Group and by Phy Required: 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicia 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? the second rental payment on April 1, 2021. Adjusting entries are recorded at the 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through 3. Assume Mid-South Urologists Group leased the lithotripter directly from then the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31). machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical fr 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $1.6 machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. million. Prepare appropriate entries for Rand Medical fi lease payment on April 1, 2021. 1 Record lease. $123,990-beg 5 years (20 Required 2 Lessor 2 Record cash received. 3 Record cash received. 5 years 12% $1,900,000 Required 3 Prepare appropriate entries for Physicians' Leasing from the beginning of the lease Adjusting entries are recorded at the end of each fiscal year (December 31). (If no journal entry required" in the first account field. Enter your answers in whole dollai answers to nearest whole dollars.) Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) X Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter 5 years Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset $1,900,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Lessee View transaction list 1 Record lease. $123,990-beginning of each period 5 years (20 quarters) Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.) 2 Record cash received. Required 2 Lesson 3 Record cash received. Required 3 > Show less A
Transcribed Image Text:Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead o Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-S $1. PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset Required 1 Complete this question by entering your answers in the tabs below. Required 2 Lessee View transaction list Required: 1. How should this lease be classified by Mid-South Urologists Group and by Phy Required: 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicia 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? the second rental payment on April 1, 2021. Adjusting entries are recorded at the 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through 3. Assume Mid-South Urologists Group leased the lithotripter directly from then the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31). machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical fr 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $1.6 machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. million. Prepare appropriate entries for Rand Medical fi lease payment on April 1, 2021. 1 Record lease. $123,990-beg 5 years (20 Required 2 Lessor 2 Record cash received. 3 Record cash received. 5 years 12% $1,900,000 Required 3 Prepare appropriate entries for Physicians' Leasing from the beginning of the lease Adjusting entries are recorded at the end of each fiscal year (December 31). (If no journal entry required" in the first account field. Enter your answers in whole dollai answers to nearest whole dollars.) Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) X Lease Description: Quarterly lease payments Lease term No residual value; no purchase option Economic life of lithotripter 5 years Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset $1,900,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Lessee View transaction list 1 Record lease. $123,990-beginning of each period 5 years (20 quarters) Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.) 2 Record cash received. Required 2 Lesson 3 Record cash received. Required 3 > Show less A
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