Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2024. International Machines manufactured the equipment at a cost of $90,000. Manufacturers Southern's fiscal year ends December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Related Information:
Lease term	2	years (8 quarterly periods)
Quarterly rental payments	$ 15,500	at the beginning of each period
Economic life of asset	2	years
Fair value of asset	$ 117,772
Implicit interest rate	6%

Required:

1. Show how International Machines determined the $15,500 quarterly lease payments.

2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2024, and the second lease payment on April 1, 2024.