Question

Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2021. Courtney purchased the equipment from Doane Machines at a cost of $260,000, its fair value. (FV of S1, PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $0 (Use appropriate factor(s) from the tables provided.) Related Information Lease term Quarterly lease payments Economie life of asset Interest rate charged by the lesson 2 years ( quarterly periods) $25,000 at Jan 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dee. ) thereafter 5 years 120 Required: Prepare a lease amortization schedule and appropriate entries for Baillie Power from the beginning of the lease through December 31, 2021. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter. Complete this question by entering your answers in the tabs below. Amort Schedule General Journal

Answer 1

Dear Student , In Question , asked or only lease Amortization table ,. I have provided the same below . Question not asked for any Journal Entries . Please let me know if any one is looking for Journal Entries of lease accounting . I will provide the same .

Thank You!!

Lease entered 1st Jan 2021
Cost of Equipment $ 260,000
Lease Term	2 year= 8 Quarterly periods
Quarterly payment $	25000
Economic life of the asset	5 Years
Interest rate	12%
Mainly need to prepare " Amortization table "
Interest rate = Quarterly basis	3%	(12%/4)
Calculate Present Value of Annuity
Qtr 1	0.97
Qtr 2	0.94
Qtr 3	0.92
Qtr 4	0.89
Qtr 5	0.86
Qtr 6	0.84
Qtr 7	0.81
Qtr 8	0.79
Sum of Discount Factor	7.02
Quarterly payment $	25000
present value $	1,75,492
($25000*7.02)
Lease Amortization table
Date	Payment $(a)	Interest($)-b	Amortization$-c	Lease value $-d
1/1/2021				1,75,492
1/1/2021	25000			1,50,492	(d-a)
31/3/2021	25000	4,515	20,485	1,30,007	(d-c)
30/6/2021	25000	3,900	21,100	1,08,907
30/9/2021	25000	3,267	21,733	87,175
31/12/2021	25000	2,615	22,385	64,790
31/3/2022	25000	1,944	23,056	41,733
30/6/2022	25000	1,252	23,748	17,985
30/9/2022	25000	540	24,460	-
In general Interest calculated =3% on Lease value
Amortization value = Lease payment - Interest amount
Lease value = Erlie Qtr closing value - Current Qtr Amortization value