Exercise 15-8 Sales-type lease with selling profit lessor; calculate lease payme

Question

Exercise 15-8 Sales-type lease with selling profit lessor; calculate lease payments LO15-3] manufactured the equipment at a cost of $89,000 Manufacturers Southern's fiscal year end$ December 31 OOS1 ProSEYA S1. PVA of$1. EVAD of $1 and PVAD of SD (Use appropriete factor(s) from the tables provided.) Related Information: Quarterly rental payments 516,039 at the beginning of each period Econonic life of asset Fair value of asset Implicit interest rate $117,59e iek Required 1. Show how International Machines determined the $16,000 quarterly lease payments. 2 Prepare appropriate entries for International Machines to record the lease at its beginning, January 1 2018, and the second lease payment on Apri 1, 2018. Complete this question by entering your answers in the tabs below International Machines determined the $16,000 quarterly lease payments. (Round your intermediate and final answers to nearest whole dollac) PV of Lease Payment Required 2>

Explanation / Answer

1 P.V of lease 7.34939 n= 10 i= 10/4 2.5 117590/7.34939 Lease payament 16000 Date General Journal Debit Credit 01/01/2018 Lease receivable 117590 COGS 89000 Inventory of equipment 89000 Sales Revenue 117590 Cash 16000 Lease receivable 16000 04/01/2018 Cash 16000 Lease Revenue (117590-16000)*2% 2032 Lease receivable 13968

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