Question

Exercise 15-6 (Algo) Finance lease; lessee (LO15-2] Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $123,288. (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 Quarterly rental payments Economic life of asset Fair value of asset Implicit interest rate (Also lessee's incremental borrowing rate) 2 years (8 quarterly periods) $16,500 at the beginning of each period 2 years $123,288 8% Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization of the right-of-use asset is recorded at the end of each fiscal year (December 31) on a straight-line basis. Complete this question by entering your answers in the tabs below. Amort Schedule General Journal Record the appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. A recorded at the end of each fiscal year (December 31) on a straight-line basis. (Enter your answers in whole dollars an Round your intermediate and final answers to the nearest whole dollar. If no entry is required for a transaction/event, : entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 > Record the beginning of the lease for Manufacturers Southern.

Answer 1

Quarter	LeasePayment	EffectiveInterest	DecreaseBalance	LeaseBalance
				$123,288
1	$16,500	0	$16,500	$106,788
2	$16,500	$2,136	$14,364	$92,424
3	$16,500	$1,848	$14,652	$77,772
4	$16,500	$1,555	$14,945	$62,828
5	$16,500	$1,257	$15,243	$47,584
6	$16,500	$952	$15,548	$32,036
7	$16,500	$641	$15,859	$16,177
8	$16,500	$324	$16,176	$0
	$132,000	$8,712	$123,288

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