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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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