11) Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians Leasing purchased a lithotripter from Rand for $2,260,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.)

Lease Description:
Quarterly lease payments	$	147,483beginning of each period
Lease term		5 years (20 quarters)
No residual value no purchase option
Economic life of lithotripter		5 years
Implicit interest rate and lessee's incremental borrowing rate		12%
Fair value of asset	$	2,260,000

Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31). 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $1.9 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2021.

16)

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $19,500 are payable at the beginning of each year. Each is a finance lease for the lessee. (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.)

	Situation
		1			2			3			4
Lease term (years)		5			5			5			5
Assets useful life (years)		5			6			6			8
Lessors implicit rate (known by lessee)		9	%		9	%		9	%		9	%
Residual value:
Guaranteed by lessee		0		$	7,800		$	3,900			0
Unguaranteed		0			0		$	3,900		$	7,800
Purchase option:
After (years)		none			4			5			3
Exercise price		n/a		$	8,900		$	2,900		$	4,900
Reasonably certain?		n/a			no			no			yes

Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.)

			Situation
			1	2	3	4
A.	The lessors:
	1.	Total lease payments
	2.	Gross investment in the lease
	3.	Net investment in the lease
B.	The lessees:
	4.	Total lease payments
	5.	Right-of-use asset
	6.	Lease liability

19) High Time Tours leased rock-climbing equipment from Adventures Leasing on January 1, 2021. High Time has the option to renew the lease at the end of two years for an additional three years for $8,500 per quarter. Adventures purchased the equipment at a cost of $206,858. (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)
Lease renewal option for an additional		3 years at $8,500 per quarter
Quarterly lease payments	$	15,700 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter.
Economic life of asset		5 years
Interest rate charged by the lessor		8%

Problem 15-12 (Algo) Part 1

Required: 1. Prepare appropriate entries for High Time Tours from the beginning of the lease through March 31, 2021. Appropriate adjusting entries are made quarterly. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.)