Question

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $112.080.

Answer 1

1. Lease Amortization Schedule

Date	Payment	Effective Increase	Decrease in Balance	Outstanding Balance
01/01/2021				$112,080
01/01/2021	$15,000		$15,000	$97,080
01/04/2021	$15,000	$1,942	$13,058	$84,022
01/07/2021	$15,000	$1,680	$13,320	$70,702
01/10/2021	$15,000	$1,414	$13,586	$57,116
01/01/2022	$15,000	$1,142	$13,858	$43,258
01/04/2022	$15,000	$865	$14,135	$29,123
01/07/2022	$15,000	$582	$14,418	$14,705
01/10/2022	$15,000	$294	$14,705	0
Total	$120,000	$7,919	$112,080

2. Journal Entry

Date	Account Title and Explanation	Debit	Credit
Jan 1.2021	Leased Equipment	$112,080
	Lease Payable		$112,080
Jan 1 2021	Lease Payable	$15,000
	Cash		$15,000
April 1	Interest Expense	$1,942
	Lease Payable	$13,058
	Cash		$15,000
July 1 2021	Interest Expense	$1,680
	Lease Payable	$13,320
	Cash		$15,000
Oct 1.2021	Interest Expense	$1,414
	Lease Payable	$13,586
	Cash		$15,000
Dec.31.2021	Interest Expense	$1,142
	Interest Payable		$1,142
Dec.31.2021	Depreciation Expanse ($112,080/2)	$56,040
	Accumulated Depreciation		$56,040
Jan1. 2022	Interest Payable	$1,142
	Lease Payable	$13,858
	Cash		$15,000
April.1.2022	Interest Payable	$865
	Lease Payable	$14,135
	Cash		$15,000
July 1.2022	Interest Payable	$582
	Lease Payable	$14,418
	Cash		$15,000
Oct.1 .2022	Interest Payable	$294
	Lease Payable	$14,706
	Cash		$15,000