Newton Labs leased chronometers from Brookline Instruments on January 1, 2024. Brookline Instruments manufactured the chronometers...

Transcribed Image Text:

Newton Labs leased chronometers from Brookline Instruments on January 1, 2024. Brookline Instruments manufactured the chronometers at a cost of $120,000. The chronometers have a fair value of $150,137. Appropriate adjusting entries are made quarterly. Related Information: Lease term Quarterly lease payments 5 years (20 quarterly periods) $ 8,730 at January 1, 2024, and at March 31, June 30, September 30, and December 31 thereafter. Economic life of asset 6 years Estimated residual value of chronometers at end of lease term $ 6,738 8% Interest rate charged by the lessor Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare appropriate entries for Newton Labs to record the arrangement at its commencement, January 1, 2024, and on March 31, 2024. 2. Prepare appropriate entries for Brookline Instruments to record the arrangement at its commencement, January 1, 2024, and on March 31, 2024. Newton Labs leased chronometers from Brookline Instruments on January 1, 2024. Brookline Instruments manufactured the chronometers at a cost of $120,000. The chronometers have a fair value of $150,137. Appropriate adjusting entries are made quarterly. Related Information: Lease term Quarterly lease payments 5 years (20 quarterly periods) $ 8,730 at January 1, 2024, and at March 31, June 30, September 30, and December 31 thereafter. Economic life of asset 6 years Estimated residual value of chronometers at end of lease term $ 6,738 8% Interest rate charged by the lessor Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare appropriate entries for Newton Labs to record the arrangement at its commencement, January 1, 2024, and on March 31, 2024. 2. Prepare appropriate entries for Brookline Instruments to record the arrangement at its commencement, January 1, 2024, and on March 31, 2024.