Edison Leasing leased high-tech electronic equipment to Manufacturers Southern o

Question

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $119,300. (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.)

Required:

Prepare a lease amortization schedule for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31. (Enter your answers in whole dollars and not in millions. Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.)

Prepare the appropriate General Journal entries for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in millions. Round your intermediate and final answers to nearest whole dollar.)

1. Record the lease.

2.Record cash received.

3 Record cash received.

4. Record cash received.

5. Record cash received.

6. Record interest receivable.

7.Record cash received..

Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $16,500 at the beginning of each period Economic life of asset 2 years Fair value of asset $119,300 Implicit interest rate 12% (Also lessee’s incremental borrowing rate)

Explanation / Answer

1)LEASE AMORTIZATION SCHEDULE

2.JOURNAL IN BOOKS OF EDISON LEASING

PAYMENT 411DATE LEASE PAYMENTS INTEREST EXPENSE DECREASE IN BALANCE LEASE BALANCE 01/01/2018 $119,300 01/01/2018 16500 0 16500 $102,800 04/01/2018 16500 3084(102800*12%*3/12) 13416(16500-3084) $89,384 07/01/2018 16500 2682 13818 $75,566 10/01/2018 16500 2267 14233 $613,33 01/01/2019 16500 1840 14660 $46,673 04/01/2019 16500 1400 15100 $31,573 07/01/2019 16500 947 15553 $16,020 10/01/2019 16500 480 16020 0 TOTAL $132000 $12,700 $119,300

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