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Manufacturers Southern leased high-tech electronic equipmentfrom International Machines on January 1, 2018. InternationalMachines manufactured the equipment at a cost of $86,000.Manufacturers Southern's fiscal year ends December 31. (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 tablesprovided.)RelatedInformation:Lease term2 years (8 quarterlyperiods)Quarterly rental payments$15,000 at the beginning of eachperiodEconomic life of asset2 yearsFair value of asset$113,973Implicit interest rate6%Required:1. Show how International Machines determined the$15,000 quarterly lease payments.2. Prepare appropriate entries for InternationalMachines to record the lease at its beginning, January 1, 2018, andthe second lease payment on April 1, 2018.