Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Prepare appropriate entries for Mid$-$South Urologists Group from the beginning of the lease through the second rental

payment on April $1,2024.$ Adjusting entries are recorded at the end of each fiscal year $($December $31).$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter you

answers in whole dollars rounded to the nearest dollar rather than in millions. Prepare appropriate entries for Physicians' Leasing from the beginning of the lease through the second rental payment on

April $1,2024.$ Adjusting entries are recorded at the end of each fiscal year $($December $31).$

Note: 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 rounded to the nearest dollar rather than in millions. Required $2$

Required $2$

Lessee

Lessor

Required $3$

Assume Mid$-$South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine at a cost of $$2\mathrm{.}1$ million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease payment on April $1,2024.$

Note: 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 rounded to the nearest dollar rather than in millions.

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$\backslash$table$[[$No$,$Date,,,Debit,Credit$],[1,$January $01,2024,$Lease receivable,grad,$2,420,000,],[,$Cost of goods sold,grad,,$2,420,000$x$],[,$Equipment,$\backslash$gamma $,2,100,000\backslash$times $,],[,$Sales revenue,grad,,$2,100,000\backslash$times $],[2,$January $01,2024,$Cash,O$,171,219,],[,$Lease receivable,grad,,$171,219],[3,$April $01,2024,$Cash,grad,$171,219,],[,$Interest revenue,grad,,$97,412],[,$Lease receivable,grad,,$73,807\backslash$times $]]$

Leasing purchased a lithotripter from Rand for $$2,420,000$ and leased it to Mid$-$South Urologists Group, Incorporated, on January $1,$

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)$Quarterly lease payments $ $171,219-$beginning of each period

Lease term $5$ years $(20$ quarters$)$

No residual value; no purchase option

Economic life of lithotripter $5$ years

Implicit interest rate and lessee's incremental borrowing rate $16\%$

Fair value of asset $ $$2,420,000$Required:

How should this lease be classified by Mid$-$South Urologists Group and by Physicians' Leasing?

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 $1,2024.$ Adjusting entries are recorded at the end of each fiscal year $($December $31).$

Assume Mid$-$South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the

machine at a cost of $$2\mathrm{.}1$ million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the

second lease payment on April $1,2024.$