Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $2,000,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2011. Lease Description: Quarterly lease payments $ 130,516 beginning of each period Lease term 5years (20 quarters) No residual value; no BPO Economic life of lithotripter 5years Implicit interest rate and lessee's incremental borrowing rate 12% Fair value of asset $ 2,000,000 Collectibility of the lease payments is reasonably assured, and there are no lessor costs yet to be incurred. Required: (1) How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing? Mid-South Urologists Group Physicians' Leasing (2) Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the inception of the lease through the second rental payment on April 1, 2011. Depreciation is recorded at the end of each fiscal year (December 31). (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Mid-South Urologists Group (Lessee): Date General Journal Debit Credit Jan. 1 April 1 Physicians' Leasing (Lessor): Date General Journal Debit Credit Jan. 1 April 1 (3) Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $1.7 million. Prepare appropriate entries for Rand Medical from the inception of the lease through the second lease payment on April 1, 2011. (Enter your answers in dollars not in millions. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Date General Journal Debit Credit Jan. 1 April 1