Maker Corp. manufactures imaging equipment. Easy Leasing purchased an MRI machine from Maker for $1,000,000 and leased it to Imaging Group, Inc. on January 1, 2018. Required:
Round your answers to the nearest whole dollar amounts.
1. How should this lease be classified by Imaging Group and by Easy Leasing?
2. Prepare appropriate entries for both Imaging Group and Easy Leasing from the beginning of the lease through the second rental payment on April 1, 2018. Depreciation and amortization are recorded at the end of each fiscal year (December 31).
3. Assume Imaging Group leased the machine directly from the manufacturer, Maker Corp., which produced the machine at a cost of $700,000. Prepare appropriate entries for Maker from the beginning of the lease through the second rental payment on April 1, 2018.

Question

Maker Corp. manufactures imaging equipment. Easy Leasing purchased an MRI machine from Maker for $1,000,000 and leased it to Imaging Group, Inc. on January 1, 2018.  Required:
Round your answers to the nearest whole dollar amounts.
1. How should this lease be classified by Imaging Group and by Easy Leasing?
2. Prepare appropriate entries for both Imaging Group and Easy Leasing from the beginning of the lease through the second rental payment on April 1, 2018. Depreciation and amortization are recorded at the end of each fiscal year (December 31).
3. Assume Imaging Group leased the machine directly from the manufacturer, Maker Corp., which produced the machine at a cost of $700,000. Prepare appropriate entries for Maker from the beginning of the lease through the second rental payment on April 1, 2018.

Quizplus · Accepted Answer

The Answer of Maker Corp. manufactures imaging equipment. Easy Leasing purchased an MRI machine from Maker for $1,000,000 and leased it to Imaging Group, Inc. on January 1, 2018.  Required:
Round your answers to the nearest whole dollar amounts.
1. How should this lease be classified by Imaging Group and by Easy Leasing?
2. Prepare appropriate entries for both Imaging Group and Easy Leasing from the beginning of the lease through the second rental payment on April 1, 2018. Depreciation and amortization are recorded at the end of each fiscal year (December 31).
3. Assume Imaging Group leased the machine directly from the manufacturer, Maker Corp., which produced the machine at a cost of $700,000. Prepare appropriate entries for Maker from the beginning of the lease through the second rental payment on April 1, 2018.