Exotic Manufacturers leased high$-$tech electronic equipment from Madison Leasing on January $1,$ year $1.$ Madison purchased the equipment from International Machines at a cost of $$117,590.$

Lease term

Quarterly rental payments

Economic life of asset

Fair value of asset

Implicit interest rate

$($Also lessee$$s incremental borrowing rate$)$

Required:

$2$ years $(8$ quarterly periods$)$

$$16,000$ at the beginning of each period $2$ years

$$117,590$

$10\%$

Prepare a lease amortization schedule and appropriate entries for Exotic Manufacturers

from the beginning of the lease through January $1,$ year $2.$ Depreciation is recorded at the end of each fiscal year $($December $31)$ on a straight$-$line basis.