Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2013. Edison purchased the equipment from International Machines at a cost of $119,552.
| Related Information: |
| Lease term |
2 years (8 quarterly periods) |
| Quarterly lease payments |
$16,000 at Jan. 1, 2013, and at Mar. 31, June 30, |
|
Sept. 30, and Dec. 31 thereafter. |
| Economic life of asset |
5 years |
| Interest rate charged by the lessor |
8%
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Respond to the question with the presumption that the guidance provided by the proposed Accounting Standards Update is being applied.
| Required: |
|
Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the commencement of the lease through December 31, 2013. December 31 is the fiscal year end for each company. Appropriate adjusting entries are recorded at the end of each quarter
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