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. (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.)Lease Description:Quarterly lease paymentsLease termNo residual value; no purchase optionEconomic life of lithotripterImplicit interest rate and lessee's incremental borrowing rateFair value of assetRequired: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 throughthe 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 themachine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the secondlease payment on April 1, 2021.Required 1Complete this question by entering your answers in the tabs below.Required 2LesseeView transaction list1 Record lease.$123,990-beginning of each period5 years (20 quarters)Required 2Lessor2 Record cash payment.3 Record cash payment.5 years12%$1,900,000Required 3Prepare appropriate entries for Mid-South Urologists Group from the beginning of the lease through the second rental payment on April1, 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. Roundyour answers to nearest whole dollars.)XShow less Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead oLeasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-S$1. PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriateLease Description:Quarterly lease paymentsLease termNo residual value; no purchase optionEconomic life of lithotripterImplicit interest rate and lessee's incremental borrowing rateFair value of assetRequired 1Complete this question by entering your answers in the tabs below.Required 2LesseeView transaction listRequired:1. How should this lease be classified by Mid-South Urologists Group and by Phy Required:2. Prepare appropriate entries for both Mid-South Urologists Group and Physicia 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing?the second rental payment on April 1, 2021. Adjusting entries are recorded at the 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through3. Assume Mid-South Urologists Group leased the lithotripter directly from then the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31).machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical fr 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced themachine at a cost of $1.6machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the secondlease payment on April 1, 2021.million. Prepare appropriate entries for Rand Medical filease payment on April 1, 2021.1 Record lease.$123,990-beg5 years (20Required 2Lessor2Record cash received.3 Record cash received.5 years12%$1,900,000Required 3Prepare appropriate entries for Physicians' Leasing from the beginning of the leaseAdjusting entries are recorded at the end of each fiscal year (December 31). (If nojournal entry required" in the first account field. Enter your answers in whole dollaianswers to nearest whole dollars.)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. (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.)XLease Description:Quarterly lease paymentsLease termNo residual value; no purchase optionEconomic life of lithotripter5 yearsImplicit interest rate and lessee's incremental borrowing rate 12%Fair value of asset$1,900,000Complete this question by entering your answers in the tabs below.Required 1Required 2LesseeView transaction list1 Record lease.$123,990-beginning of each period5 years (20 quarters)Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine ata cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease paymenton April 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter youranswers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.)2 Record cash received.Required 2Lesson3 Record cash received.Required 3Show less A

Question

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. (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.)Lease Description:Quarterly lease paymentsLease termNo residual value; no purchase optionEconomic life of lithotripterImplicit interest rate and lessee's incremental borrowing rateFair value of assetRequired: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 throughthe 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 themachine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the secondlease payment on April 1, 2021.Required 1Complete this question by entering your answers in the tabs below.Required 2LesseeView transaction list1 Record lease.$123,990-beginning of each period5 years (20 quarters)Required 2Lessor2 Record cash payment.3 Record cash payment.5 years12%$1,900,000Required 3Prepare appropriate entries for Mid-South Urologists Group from the beginning of the lease through the second rental payment on April1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31). (If no entry is required for a transaction/event,select &#34;No journal entry required&#34; in the first account field. Enter your answers in whole dollars and not in the millions of dollars. Roundyour answers to nearest whole dollars.)X>Show less Rand Medical manufactures lithotripters. Lithotripsy uses shock waves instead oLeasing purchased a lithotripter from Rand for $1,900,000 and leased it to Mid-S$1. PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriateLease Description:Quarterly lease paymentsLease termNo residual value; no purchase optionEconomic life of lithotripterImplicit interest rate and lessee's incremental borrowing rateFair value of assetRequired 1Complete this question by entering your answers in the tabs below.Required 2LesseeView transaction listRequired:1. How should this lease be classified by Mid-South Urologists Group and by Phy Required:2. Prepare appropriate entries for both Mid-South Urologists Group and Physicia 1. How should this lease be classified by Mid-South Urologists Group and by Physicians' Leasing?the second rental payment on April 1, 2021. Adjusting entries are recorded at the 2. Prepare appropriate entries for both Mid-South Urologists Group and Physicians' Leasing from the beginning of the lease through3. Assume Mid-South Urologists Group leased the lithotripter directly from then the second rental payment on April 1, 2021. Adjusting entries are recorded at the end of each fiscal year (December 31).machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical fr 3. Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced themachine at a cost of $1.6machine at a cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the secondlease payment on April 1, 2021.million. Prepare appropriate entries for Rand Medical filease payment on April 1, 2021.1 Record lease.$123,990-beg5 years (20Required 2Lessor2Record cash received.3 Record cash received.5 years12%$1,900,000Required 3Prepare appropriate entries for Physicians' Leasing from the beginning of the leaseAdjusting entries are recorded at the end of each fiscal year (December 31). (If nojournal entry required&#34; in the first account field. Enter your answers in whole dollaianswers to nearest whole dollars.)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. (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.)XLease Description:Quarterly lease paymentsLease termNo residual value; no purchase optionEconomic life of lithotripter5 yearsImplicit interest rate and lessee's incremental borrowing rate 12%Fair value of asset$1,900,000Complete this question by entering your answers in the tabs below.Required 1Required 2LesseeView transaction list1 Record lease.$123,990-beginning of each period5 years (20 quarters)Assume Mid-South Urologists Group leased the lithotripter directly from the manufacturer, Rand Medical, which produced the machine ata cost of $1.6 million. Prepare appropriate entries for Rand Medical from the beginning of the lease through the second lease paymenton April 1, 2021. (If no entry is required for a transaction/event, select &#34;No journal entry required&#34; in the first account field. Enter youranswers in whole dollars and not in the millions of dollars. Round your answers to nearest whole dollars.)2 Record cash received.Required 2Lesson3 Record cash received.Required 3>Show less A

Accepted Answer

Solution 1:

Quarterly lease payment
123990

*Present value annuity due @3% for 20 quarters…