Question

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 $168,120. (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) $22,500 at the beginning of each period 2 years $168, 120 8% Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization 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 Prepare a lease amortization schedule for the term of the lease for Manufacturers Southern. (Round your intermediate calculations and final answers to the nearest whole dollar) Payment Date Lease Payments Effective Interest Decrease in Balance Lease Balance 01/01/2021 04/01/2021 07/01/2021 10/01/2021 01/01/2022 04/01/2022 07/01/2022 10/01/2022 Total $ 0 $ 0 $ 0 Amort Schedule General Journal >

Part 2: Journal Entries

Record the beginning of the lease for Manufacturers Southern.

Record lease payment. (Jan 1 2021)

Record lease payment. (April 1 2021)

Record lease payment. (July 1 2021)

Record lease payment. (October 1 2021)

Record accrued interest. (December 31 2021)

Record amortization of the right-of-use asset. (December 31 2021)

Thank you for the effort you give in solving these questions! It is appreciated

8. Record lease payment (Jan 1 2022)

Here are all of the tables provided. They are listed by starting with FV of $1, PV of $1, FV of an Ordinary Annuity, PV of an Ordinary Annuity, FV of an Annuity Due, and PV of an Annuity Due.

Thank you all so much for the help! Thumbs up for all the great work provided!

Answer 1

Solution 1:

Payment Date	Lease payments	Effective interest	Decrease in balance	Lease balance
1-Jan-21				$168,120
1-Jan-21	$22,500	$0	$22,500	$145,620
1-Apr-21	$22,500	$2,912	$19,588	$126,032
1-Jul-21	$22,500	$2,521	$19,979	$106,053
1-Oct-21	$22,500	$2,121	$20,379	$85,674
1-Jan-22	$22,500	$1,713	$20,787	$64,887
1-Apr-22	$22,500	$1,298	$21,202	$43,685
1-Jul-22	$22,500	$874	$21,626	$22,059
1-Oct-22	$22,500	$441	$22,059	$0
Total	$180,000	$11,880

Solution 2:

Manufacturers Southern
Journal Entries
Date	Particulars	Debit	Credit
1-Jan-21	Equipment Dr	$168,120.00
	To Lease Payable		$168,120.00
	(To record lease)
1-Jan-21	Lease Payable Dr	$22,500.00
	To Cash		$22,500.00
	(To record lease payment)
1-Apr-21	Interest expense Dr	$2,912.00
	Lease payable Dr	$19,588.00
	To Cash		$22,500.00
	(To record lease payment)
1-Jul-21	Interest expense Dr	$2,521.00
	Lease payable Dr	$19,979.00
	To Cash		$22,500.00
	(To record lease payment)
1-Oct-21	Interest expense Dr	$2,121.00
	Lease payable Dr	$20,379.00
	To Cash		$22,500.00
	(To record lease payment)
31-Dec-21	Depreciation expense Dr	$84,060.00
	To Accumulated depreciation - Equipment		$84,060.00
	(To record amortization)
31-Dec-21	Interest expense Dr	$1,713.00
	To Interest payable		$1,713.00
	(To record interest expense accured)
1-Jan-22	Interest payable Dr	$1,713.00
	Lease payable Dr	$20,787.00
	To Cash		$22,500.00
	(To record lease payment)