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 $110,623. (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.)

Related Information:
Lease term	2 years (8 quarterly periods)
Quarterly rental payments	$15,300 at the beginning of each period
Economic life of asset	2 years
Fair value of asset	$110,623
Implicit interest rate	12%
(Also lessee’s incremental borrowing rate)

Required:
Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31.

• Amort Schedule

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.)

	Payment date Lease Payments Effective Interest Decrease in Balance Lease Balance 01/01/2018 01/01/2018 04/01/2018 07/01/2018 10/01/2018 01/01/2019 04/01/2019 07/01/2019 10/01/2019 Total $0 $0 $0

• General Journal

Prepare the appropriate 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.)

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Journal entry worksheet

• Record the lease.

Note: Enter debits before credits.

	Date General Journal Debit Credit January 01, 2018

Answer 1

for formulas and calculations, refer to the image below -