Prepare appropriate entries for mid-south urologists group

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Reference no: EM132936479

Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead of surgery to eliminate kidney stones. Physicians' Leasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-South Urologists Group, Inc., on January 1, 2021.

Lease Description:

Quarterly lease payments $123,990-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 12%
Fair value of asset $1,900,000

Problem 1. Prepare appropriate entries for Mid-South Urologists Group from the beginning of the lease through the second rental payment on April 1, 2021.

Reference no: EM132936479

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