Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2013. Edison purchased the equipment from International Machines at a cost of $112,080.

Related Information:

Lease term 2 years (8 quarterly periods)
Quarterly rental payments $15,000 at the beginning of each period
Economic life of asset 2 years
Fair value of asset $112,080
Implicit interest rate 8%
(Also lessee's incremental borrowing rate)

Required:

Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the inception of the lease through January 1, 2014. Depreciation is recorded at the end of each fiscal year (December 31) on a straight-line basis.