Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $135,990. (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	$18,200 at the beginning of each period
Economic life of asset	2 years
Fair value of asset	$135,990
Implicit interest rate	8%
(Also lessees incremental borrowing rate)

Required: Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2019. Depreciation is recorded at the end of each fiscal year (December 31) on a straight-line basis.

Journal Entry:

• Record the beginning of the lease for Manufacturers Southern. (Jan 1, 2018)
• Record the beginning of the lease for Manufacturers Southern. (Jan 1, 2018)
• Record the beginning of the lease for Manufacturers Southern. (Apr 1, 2018)
• Record the beginning of the lease for Manufacturers Southern. (July 1, 2018)
• Record the beginning of the lease for Manufacturers Southern. (October 1, 2018)
• Record accrued interest. (December 31, 2018)
• Record the amortization for right-of-use asset by Manufacturers Southern. (December 31,2018)
• Record lease payment (Jan 01, 2019)

Payment Date Lease Payments Effective Interest Decrease in Balance Lease Balance $ 135,990 $ 0 $ 18,200 117,790 01/01/2018 04/01/2018 18,200 18,200 07/01/2018 10/01/2018 01/01/2019 04/01/2019 07/01/2019 10/01/2019 Total | $ 36,400 $ 0 $ 18,200