9) Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $105,000. Manufacturers Southern's fiscal year ends December 31. (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.)     Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $17,000 at the beginning of each period Economic life of asset 2 years Fair value of asset $127,024 Implicit interest rate 8%

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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9) Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2021. International Machines manufactured the equipment at a cost of $105,000. Manufacturers Southern's fiscal year ends December 31. (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.)
 

 
Related Information:
Lease term 2 years (8 quarterly periods)
Quarterly rental payments $17,000 at the beginning of each period
Economic life of asset 2 years
Fair value of asset $127,024
Implicit interest rate 8%
 

 
Required:
1. Show how International Machines determined the $17,000 quarterly lease payments.
2. Prepare appropriate entries for International Machines to record the lease at its beginning, January 1, 2021, and the second lease payment on April 1, 2021.
 

 
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