Question

Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $136,768. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of 5.1) (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 $18.000 at 2 years $136.768 quarterly periods) beginning of each period Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2019. Depreciation is recorded at the end of each fiscal year (December 31) on a straight-line basis. Answer is not complete. 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. (Enter all amounts as positive

Answer 1

Lease Payment date Mective Interest Decxase in balance Payments 01/1/2018 Ou]01/2018 07/03/2017 $123 $12000 $18000 $18000 $18000 $18000 $18000 $12000 $18000 N2 NR Sibolg 04/01 2019 07 Joll2019 10/01/2019 Lease Balance $136768 $ 118762 $102550 $86088 $69379 $52420 $35206 $17734 $ 1782 $ 1538 $1291 $104 $786 $528 $266 $18000 $16218 $ 16462 $16709 $16959 $17214 $17471 $17734

Jounal Entries. Date 01/01/2018 Particulars. Right of use Asset $136768 Lease liability $136768 (Record the beginning of lease) 01/01/2018 Lease liability $18000 - Bank $18000 [ Record Lease payment)

04012018 $18000 Lease habillhy $16218. Intexst expense $1782 - Bank (Record lease payment) Lease liability $16462 Antesest expense $1538 - Bank (Recosd lease payment) 07/01/2018 $18000 10/01/2018 Lease liability $16709 Interest expense $1291 - Bank $18000 (Record lease payment) Interest expense $1041 Interest payable $1041 [ Recosed acessed interest) 31/12 18 3112118 Depreciation $68384 Right of use Asset (Record amortisation) $136768 x $68384