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 $112,446. (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.)
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Related Information:
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Lease term
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2 years (8 quarterly periods)
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Quarterly rental payments
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$15,300 at the beginning of each period
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Economic life of asset
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2 years
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Fair value of asset
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$112,446
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Implicit interest rate
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10%
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(Also lessee’s incremental borrowing rate)
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Required:
Prepare a lease amortization schedule for the term of the lease. Also record the appropriate entries for Manufacturers Southern from the inception of the lease through January 1, 2014. Depreciation is recorded at the end of each fiscal year (December 31) on a straight-line basis. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)