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Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $131,379.

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $131,379. (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.) or Use Intermediate Accounting table if not provided.

Related Information:
Lease term 2 years (8 quarterly periods)
Quarterly rental payments $17,000 at the beginning of each period
Economic life of asset 2 years
Fair value of asset $131,379
Implicit interest rate 4%
(Also lessees incremental borrowing rate)

Required: Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2022. Edisons fiscal year ends December 31.

Amortization schedule

Payment Date

Lease Payments

Effective Interest

Decrease in Balance

Lease Balance

1/1/2021

1/1/2021

4/1/2021

7/1/2021

10/1/2022

1/1/2022

4/1/2022

7/1/2022

10/1/2022

Total

General Journal

1. Record the lease. (January 1,2021)

2. Record cash received. (January 1,2021)

3. Record cash received. (April 1, 2021)

4.Record cash received. (July 1, 2021)

5. Record cash received. (October 1, 2021)

6. Record interest receivable. (December 31, 2021)

7. Record cash received. (January 1, 2022)

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