Question

please help! the journal entries are all correct i need help on the amounts!!

Newton Labs leased chronometers from Brookline Instruments on January 1, 2021 Brookline Instruments manufactured the chronometers at a cost of $330,000. The chronometers have a fair value of $429,000. Appropriate adjusting entries are made quarterly. (FV of $1. PV of $1. EVA of $1. PVA of $1. FVAD of S1 and PVAD of S1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease term Quarterly lease payments Economic life of asset Estimated residual value of chronometers at end of lease term Interest rate charged by the lesson 5 years (20 quarterly periods) $ 24,002 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, 6 years $13,525 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

Answer 1

Answer:- Journal entries TIF bebit credit Date particulars |$400,316 2021 Right of use assets Ale $400,316 заи-1 To Leare payable Lease payable Ale $24,002 $24.002 - To cash MO-s Interest Expense Me(400,316-24002)27b> $1,526 34:42] Lease payable Al 1916,476 $24.002 1. To cash Amortization expense Ale (400,316%26]or $ 20,016 - To Right of use Asset *20016 working Note: Present value of lease payment = Annual Lease paymentx PVAD Rates period). $24,002 x 16.67846 = $ 400, 316 Dale particulars LF Debit credit 2021 Lease Receivable Ale $412,783 Jan-1 cost of goods sold al $317533 $400,316 To Seles Revence To Equipment $330,000 Cash Ale $24002 To Lease Receivable $24.002 Mar-31 Cash Ale 1 $24,002 To Lease Receivable $ 16,226 To Interest Revenue $7776 working Notes "Lease Receivable . Annual lease payment x PUAD (Rate, pesied) + Estimated Residural value x pu (pate, period) -L$ 24,002 x 16.67846) + $18,525*0.67297 $400,316 + $12,467 = $412,783 (2) Cost of goods sold cost prof&esidual value = $330,000-$18,525 * 0.67297 cost of goods sold 330,000-$19467 $317.533 | 3) Interest - (leave revencie - Lease payment Received.) Interestitke -($412,783 - $24,002) 3%) • $7,776 Or y la