Question

Homework Seved Help Newton Labs leased chronometers from Brookline Instruments on January 1, 2021. Brookline Instruments manufactured the chronometers at a cost of $230,000. The chronometers have a fair value of $242.340. Appropriate adjusting entries are made quarterly. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of S1 and PVAD of $ (Use appropriate factors) from the tables provided Related Information: 5 years (20 quarterly periods) Quarterly lease payments $16,729 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter. Economie life of asset 6 years Estimated residual value of chronometers at end $12,912 of lease ter Interest rate charged by the lessor Required: 1. Prepare appropriate entries for Newton Labs to record the arrangement at its commencement, January 1 2021, and on March 31 2021 2. Prepare appropriate entries for Brookline Instruments to record the arrangement at its commencement, January 1, 2021, and on March 31, 2021 Complete this question by entering your answers in the tabs below. Required Required 2 < Prev 4 of 4 !!

Answer 1

Quarterly Lease Payments P.V n = 20,1 =4 Present Value of Annual Lease Payment Add Present Value of residual value (12912".45639) Present Value of Lease Receivable 16729 14.13394 236447 5893 242340

Prepare appropriate entries for Newton Labs Debit Credit Date General Journal 2021 1-Jan Right of use asset Lease Payable 236447 236447 1-Jan Lease Payable 16729 Cash 16729 31-Mar Interest expense Lease Payable Cash 9024 7705 16729 11822 31-Mar Amortization expense Right of use asset 11822 Prepare appropriate entries for Brookline Instruments Debit Credit Date General Journal 2018 1-Jan Lease Receivable Cost of Goods Sold (230000-5893) Sales Revenue Equipment 242340 224107 236447 230000

13819 1-Jan Cash Lease Receivable 13819 16729 31-Mar Cash Interest Revenue Lease Receivable 9024 7705