Newton Labs leased chronometers from Brookline Instruments on January 1, 2021. Brookline Instruments manufactured the chronometers at a cost of $200,000. The chronometers have a fair value of $260,000.Appropriate adjusting entries are made quarterly.

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.

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Related Information: Lease term Quarterly lease payments 5 years (20 quarterly periods) $14,547 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter 6 years Economic life of asset Estimated residual value of chronometers at end $25,823 of lease term Interest rate charged by the lessor 8%