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Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1 2018 International Machines manufactured the equipment at a cost of

Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2018. International Machines manufactured the equipment at a cost of $85,000. Manufacturers Southern s fiscal year ends December 31. Related Information: Lease term ...................................... 2 years (8 quarterly periods) Quarterly rental payments ...... $15,000 at the beginning of each period Economic life of asset .................................................. 2 years Fair value of asset .................................................... $112,080 Implicit interest rate .......................................................... 8% Required: 1. Show how International Machines determined the $15,000 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 April 1, 2018?

 

Apr 24 2020 View more View Less

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