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 $123,651. (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.) Related Information: Lease term 2 years (8 quarterly periods) $16,000 at the beginning of each Quarterly rental payments period Economic life of asset 2 years Fair value of asset $123,651 Implicit interest rate 4% (Also lessee's incremental borrowing rate) Required: Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2022. Edison's fiscal year ends December 31. Complete this question by entering your answers in the tabs below. Amort Schedule General Journal Prepare a lease amortization schedule for Edison Leasing from the beginning of the lease through January 1, 2022. Edison's fiscal year ends December 31. (Round your intermediate and final answers to the nearest whole dollar. Enter all amounts as positive values.)

Answer 1

Payment Date	Lease Payments	Effective Interest	Decrease in Balance	Lease Balance
01/01/2021				$123,651
01/01/2021	$16,000	-	$16,000	$107,651
04/01/2021	$16,000	$1,077	$14,923	$92,728
07/01/2021	$16,000	$927	$15,073	$77,655
10/01/2021	$16,000	$777	$15,223	$62,431
01/01/2022	$16,000	$624	$15,376	$47,056
04/01/2022	$16,000	$471	$15,529	$31,526
07/01/2022	$16,000	$315	$15,685	$15,841
10/01/2022	$16,000	$158	$15,842	$0
Total
Effective Interest = Previous Lease Balance x 4% x 1/4
Effective Interest for 04/01/2021 = $107,651 x 1%