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Required: 1. Show how International Machines determined the $16,500 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.

Required: 1. Show how International Machines determined the $16,500 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
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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Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2024. International Machines manufactured the equipment at a cost of $96,000. Manufacturers Southern's fiscal year ends December 31. 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 Fair value of asset Implicit interest rate Required: 1. Show how International Machines determined the $16,500 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. Required 1 Required 2 Complete this question by entering your answers in the tabs below. PV factors based on Table or Calculator function: PV of Lease 2 years (8 quarterly periods) at the beginning of each period years Show how International Machines determined the $16,500 quarterly lease payments. Note: Round your intermediate and final answers to the nearest whole dollar. Round your percentage answer to 1 decimal place. Lease Payment $ 16,500 2 $ 125,370 6% n= ¡=
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 $96,000. Manufacturers Southern's fiscal year ends December 31. 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 Fair value of asset Implicit interest rate Required: 1. Show how International Machines determined the $16,500 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. Required 1 Required 2 Complete this question by entering your answers in the tabs below. PV factors based on Table or Calculator function: PV of Lease 2 years (8 quarterly periods) at the beginning of each period years Show how International Machines determined the $16,500 quarterly lease payments. Note: Round your intermediate and final answers to the nearest whole dollar. Round your percentage answer to 1 decimal place. Lease Payment $ 16,500 2 $ 125,370 6% n= ¡=
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