Problem 15-4 Finance/sales-type lease; lessee and lessor [L015-1, 15-2, 15-3 Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians Leasing purchased a lithotripter from Rand for $2,710,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2018. (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.) Lease Description Quarterly lease paymentrs Lease term 191,737-beginning of each period 5 years (20 quarters) No residual value: no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing 5 years rate $2,710,000 Fair value of asset Required: 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2018. Adjusting entries are recorded at the end of each fiscal year (December 31). 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $2.3 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April 1, 2018. Complete this question by entering your answers in the tabs below lease payment on April 1, 2018. Complete this question by entering your answers in the tabs Required 2 Lessee Required 2 Required 3 Required 1 Lessor How should this lease be classified by Mid-South Urologists Group ar Mid-South Urologists Group Physicians' Leasing Re Required 1 Required 1 Required 2 Required 2 Lessee Lessor Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the leas second rental payment on April 1, 2018. Adjusting entries are recorded at the end of each fiscal year (December 31). required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in who in the millions of dollars. Round your answers to nearest whole dollars.) View transaction list View journal entry worksheet Debit Credit Date General Journal No 2,710,000 1January 01, 2018 2,710,000 Lease payable 191,737 2 January 01, 2018 Lease payable 191,737 Cash 91,006 3April 01, 2018 Lease payable 100,731 Interest expense 191,737 Cash Required 2 Lessor > Required 1 Required 2 Required 2 Lessee Required 3 equired 1 Lessor repare appropriate entries for both Mid-South Urologists econd rental payment on April 1, 2018. Adjusting entries equired for a transaction/event, select "No journal entry n the millions of dollars. Round your answers to nearest v View transaction list Journal entry worksheet 2 3 1 Record lease. Note: Enter debits before credits. Date General Journal January 01, 2018 Required 2 Required 2 Lessee Lessor Required 3 pare appropriate entries for both Mid-South Urologists Gr ond rental payment on April 1, 2018. Adjusting entries ar uired for a transaction/event, select "No journal entry req the millions of dollars. Round your answers to nearest who iew transaction list Journal entry worksheet 2 3 Record cash received. Note: Enter debits before credits. Date General Journal January 01, 2018 Required 2 Required 2 Lessee Lessor Required 3 pare appropriate entries for both Mid-South Urologists cond rental payment on April 1, 2018. Adjusting entries quired for a transaction/event, select "No journal entry the millions of dollars. Round your answers to nearestw View transaction list Journal entry worksheet 2 Record cash received. Note: Enter debits before credits. Date General Journal April 01, 2018 Required 2 Lessee Required 2 Lessor red 1 Required 3 me Mid-South Urologists Group leased the lithotripter direct t of $2.3 million. Prepare appropriate entries for Rand Medi oril 1, 2018. (If no entry is required for a transactio pril 1, 2018. (If no entry is required for a transaction/event ers in whole dollars and not in the millions of dollars. Rounc w transaction list ournal entry worksheet 2 3 Record lease. Note: Enter debits before credits. General Journal Date January 01, 2018 2Required 3 Required 2 1 Lessee Required 2 Lessor sume Mid-South Urologists Group leased the lithotripter ost of $2.3 million. Prepare appropriate entries for Rand April 1, 2018. (If no entry is required for a transaction/e swers in whole dollars and not in the millions of dollars. R View transaction list Journal entry worksheet 3 2 Record cash received. Note: Enter debits before credits. General Journal Date January 01, 2018 Required 2 ired 1 Lessee Required 2 Lessor me Mid-South Urologists Group leased the lithotripter di st of $2.3 million. Prepare appropriate entries for Rand April 1, 2018. (If no entry is required for a transaction/ev swers in whole dollars and not in the millions of dollars. R View transaction list Journal entry worksheet 3 2 Record cash received. Note: Enter debits before credits. General Journal Date April 01, 2018