Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2016. Edison purchased the equipment from International Machines at a cost of $250,177. Manufacturers Southern elected the short-term lease option. Appropriate adjusting entries are made annually. Related Information: Lease term 1 years (4 quarterly periods) Quarterly lease payments $15,000 at Jan. 1, 2016, and at Mar. 31, June 30, Sept. 30 Economic life of asset 5 years Interest rate charged by the lessor 8% Required: 1. Prepare appropriate entries for Manufacturers Southern from the beginning of the lease through December 31, 2016.

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.