Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. edison leasing leased high-tech electronic equipme

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment...

Free

80.2K

Verified Solution

Question

Accounting

Edison Leasing leased high-tech electronic equipment toManufacturers Southern on January 1, 2018. Edison purchased theequipment from International Machines at a cost of $131,379. (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 tablesprovided.)

Related Information:
Lease term2 years (8 quarterly periods)
Quarterly rental payments$17,000 at the beginning of each period
Economic life of asset2 years
Fair value of asset$131,379
Implicit interest rate4%
(Also lessee’s incremental borrowing rate)


Required:
Prepare a lease amortization schedule and appropriate entries forEdison Leasing from the beginning of the lease through January 1,2019. Edison’s fiscal year ends December 31.

"Amort Schedule and General Journal"

Answer & Explanation Solved by verified expert
3.9 Ratings (527 Votes)

Amort schedule:

Payment Lease receivable - opening Interest revenue Payment received Lease receivable - ending balance
a b= a X 4% X 3/12 c d= a+b-c
1 $ 131,379.00 $                       -   $ 17,000.00 $ 114,379.00
2 $ 114,379.00 $           1,143.79 $ 17,000.00 $    98,522.79
3 $    98,522.79 $              985.23 $ 17,000.00 $    82,508.02
4 $    82,508.02 $              825.08 $ 17,000.00 $    66,333.10
5 $    66,333.10 $              663.33 $ 17,000.00 $    49,996.43
6 $    49,996.43 $              499.96 $ 17,000.00 $    33,496.39
7 $    33,496.39 $              334.96 $ 17,000.00 $    16,831.36
8 $    16,831.36 $              168.31 $ 17,000.00 $            (0.33)

General Journal:

Date Account Debit Credit
2018
Jan-01 Cash 17000
Lease receivable $      114,379.00
Asset $ 131,379.00
Apr-01 Cash $        17,000.00
Interest revenue $      1,143.79
Lease receivable $    15,856.21
Jul-01 Cash $        17,000.00
Interest revenue $         985.23
Lease receivable $    16,014.77
Oct-01 Cash $        17,000.00
Interest revenue $         825.08
Lease receivable $    16,174.92
Dec-31 Interest receivable $              663.33
Interest revenue $         663.33
2019
Jan-01 Cash $        17,000.00
Interest receivable $         663.33
Lease receivable $    16,336.67

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

You want to be able to withdraw $30,000 from your account each year for 20 years...

Biology
1.2K views

Prior to 1800 in England, the typical moth of the species Biston betularia(peppered moth) had a...

Chemistry
1.2K views

A sample of a substance with the empirical formula XCl2 weighs 0.5555 g. When it is...

Finance
1.2K views

Tax effects of acquisition Connors Shoe Company is contemplating the acquisition of Salinas Boots, a firm...

Geometry
1.2K views

What is the measure of arc FQ F Q 115 147 130 155 T 75...

Algebra
1.2K views

20 2 Suspected Irrational Find exact solutions not approximate solutions to each equation and show...

Accounting
1.2K views

in 2022, depreciable property with a capital cost of $100,000 and a ucc balance of...

Accounting
1.2K views

The point-slope equation for the line 5 points passes through (3,...

Accounting
1.2K views

Maple Company provides the following information about its product: What is...

Accounting
1.2K views

Margun Cost nt- Biblio Files Sales Mix Biblio Files Company is making plans for its...

Accounting
1.2K views

A company wants to evaluate the effects of a reduction in material cost of 2%...

Accounting
1.2K views

according to Ian redpath and robert feenan which of the following is not generally a...