Rand Medical manufactures lithotripters. Lithotripsy uses shock waves Instead of surgery to eliminate kidney stones. Physicians Leasing purchased a lithotripter from Rand for $2.130,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021. (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.) $193,152-beginning of each period 5 years (20 quarters) Lease Description: Quarterly lease paynents Lease term No residual value; no purchase option Economic life of lithotripter Implicit interest rate and lessee's incremental borrowing rate Fair value of asset 5 years 16% $2,730,000 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, 2021. 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, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Lessee Required 2 Lessor Required 3 Prepare appropriate entries for Physicians' Leasing from the beginning of the lease through the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each Fiscal year (December 31). (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.) Show less View transaction Mat Journal entry worksheet Required Required 2 Litsee Required 2 Less Required Prepare appropriate entries for Mid-South Urologists Group from the beginning of the lease through the second rental payment on April 1,2021. Adjusting entries are recorded at the end of each fiscal year (December 31). (If no entry is required for a transaction/event, select a foumal entry reguiredilin the first account field. Enter your answers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars:) Show less View transactions Journal entry worksheet 1 2 3 Record cash payment. Notice General Journal Debit Credit Date January 01 2021 Record entry Clos entry Vew general Journal View transaction lit Journal entry worksheet Record cash payment. Note: Enter debits before credits General Journal Debit Credit Date April 01, 2021 Record entry Clear entry Vlow general Journal Required 1 Required 2 Lessor View transaction at Journal entry worksheet 2 3 Record lease. the Note: Enter debits before credits Date General Journal Debit Credit January 01, 2021 Record entry Clear entry View general Journal Record cash received. Note: Enter debits before credits Date General Journal Debit Credit January 01, 2021 Record entry Clear entry View general Journal Required 2 Lessee Required 3 View transaction list Journal entry worksheet 2 3 Record cash received. Note: Enter debits before credits Date General Journal Debit Credit April 01, 2021 Record entry Clear entry View general Journal View transaction et Journal entry worksheet 2 3 Record lease. Natet Enter debits before credits General Journal Date January 01, 2021 Debit Credit Record entry Clear entry Vlow general Journal Record cash received Note Enter debits before credit General Journal Date January 01, 2021 Debit Credit Record entry Clear entry View general Journal
