18) Universal Leasing leases electronic equipment to a variety of businesses. The companys primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term leases. Universal earns interest under these arrangements at a 10% annual rate. Universal purchased an electronic typesetting machine on December 31, 2020, for $94,000 and then leased it to Desktop, Inc., a local publisher. The six-year operating lease term commenced January 1, 2021, and the lease contract specified annual payments of $8,400 beginning December 31, 2021, and on each December 31 through 2026. The machines estimated useful life is 15 years with no estimated residual value. The publisher had the option to terminate the lease after four years. At the beginning of the lease, there was no reason to believe the lease would be terminated. Required: 1. Prepare the appropriate entries for Universal Leasing from the beginning of the lease through the end of 2021. 2. At the beginning of 2022, there was a significant indication that Desktops economic incentive to terminate the lease had changed causing both companies to believe termination of the lease at the end of four years (three years remaining) is "reasonably certain." Prepare any appropriate entry for Universal Leasing at January 1, 2022, to reflect the change in the lease term. 3. Prepare the appropriate entry pertaining to the lease for Universal Leasing at December 31, 2022.

19A) 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.)

19B)

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 2

2. Prepare an amortization schedule for the term of the lease. (Round your intermediate and final answers to nearest whole dollar. Enter all amounts as positive values.)

Date	Lease Payments	Effective Interest	Decrease in Balance	Balance
Jan. 1, 2021
Mar. 31, 2021
June 30, 2021	15,700
Sept. 30, 2021	15,700
Dec. 31, 2021	15,700
Mar. 31, 2022	15,700
June 30, 2022	15,700
Sept. 30, 2022	15,700
Dec. 31, 2022
Mar. 31, 2023
June. 30, 2023	8,500
Sept. 30, 2023	8,500
Dec. 31, 2023	8,500
Mar. 31, 2024	8,500
June 30, 2024	8,500
Sept. 30, 2024	8,500
Dec. 31, 2024	8,500
Mar. 31, 2025	8,500
June 30, 2025	8,500
Sept. 30, 2025	8,500