1.) LEASE AMORTIZATION SCHEDULE
Payment Date | Lease Payments | Effective Interest | Decrease in Balance | Lease Balance |
01/01/21 | 140,653 | |||
01/01/21 | 18,200 | 18,200 | 122,453 | |
04/01/21 | 18,200 | 1,225 | 16,975 | 105,478 |
07/01/21 | 18,200 | 1,055 | 17,145 | 88,333 |
10/01/21 | 18,200 | 883 | 17,317 | 71,016 |
01/01/22 | 18,200 | 710 | 17,490 | 53,526 |
04/01/22 | 18,200 | 535 | 17,665 | 35,861 |
07/01/22 | 18,200 | 359 | 17,841 | 18,020 |
10/01/22 | 18,200 | 180 | 18,020 | 0 |
Total | 145,600 | 4,947 | 140,653 |
Effective interest = Preceding outstanding balance x 1% [4% per year, 1% per quarter]
Decrease in Balance = Lease payments - Effective interest
Lease balance = Preceding lease balance - Decrease in balance
2.) JOURNAL ENTRIES:
Date | Account Title and Explanation | Debit $ | Credit $ |
01/01/21 | Lease receivable | 140,653 | |
Lease Equipment | 140,653 | ||
(To record the lease) | |||
01/01/21 | Cash | 18,200 | |
Lease receivable | 18,200 | ||
(To record cash received) | |||
04/01/21 | Cash | 18,200 | |
Lease receivable | 16,975 | ||
Interest revenue | 1,225 | ||
(To record cash received) | |||
07/01/21 | Cash | 18,200 | |
Lease receivable | 17,145 | ||
Interest revenue | 1,055 | ||
(To record cash received) | |||
10/01/21 | Cash | 18,200 | |
Lease receivable | 17,317 | ||
Interest revenue | 883 | ||
(To record cash received) | |||
12/31/21 | Interest receivable | 710 | |
Interest revenue | 710 | ||
(To record interest expense) | |||
01/01/22 | Cash | 18,200 | |
Lease receivable | 17,490 | ||
Interest revenue | 710 | ||
(To record cash received) |
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Exercise 15-7 (Algo) Sales-type lease with no selling profit; lessor [LO15-2] Edison Leasing leased high-tech electronic...
Exercise 15-7 (Algo) Sales-type lease with no selling profit; lessor (LO15-2] 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 $131,379. (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...
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...
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 $139,107. (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) Quarterly rental payments $18,000 at the beginning of each period Economic life of asset 2 years Fair value of asset...
Exercise 15-7 Sales-type lease with no selling profit; lessor [LO15-2] Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $110,623. (EV of $1. PV of S1. FVA of $1, PVA of $1. EVAD of $1 and PVAD of $) (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...
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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 $127,024. (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) Quarterly rental payments $17,000 at the beginning of each period Economic life of asset 2 years Fair value of asset...
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. 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 glasrterly periods) $15,000 t e beginning of each period 2 years $112,080 8% from the beginning of the leae Required: Prepare a lease amortization schedule and appropriate entries for Edison...
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 $119,300. (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) Quarterly rental payments $16,500 at the beginning of each period Economic life of asset 2 years Fair value of asset...
Chec 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 $129,170. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of SD) (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)...
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