Exercise 15-7 Sales-type lease with no selling profit; lessor [LO15-2]

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 $113,515. (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	$15,700 at the beginning of each period
Economic life of asset	2 years
Fair value of asset	$113,515
Implicit interest rate	12%
(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, 2019. Edisons fiscal year ends December 31.

• Record the lease. Jan 1st 2018
• Record cash received. Jan 1st 2018
• Record cash received. April 01, 2018
• Record cash received. July 01 2018
• Record cash received. Oct 01 2018
• Record interest receivable. Dec 31st 2018
• Record cash received. Jan 01 2019

Schedule ournal Prepare a lease amortization schedule for Edison Leasing from the beginning of the lease through January 1, 2019. Edison 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.) Decrease in Lease Balance Balance Lease Effective Payment date Payments Interest 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 Amort Schedule General Journal>