Newton Labs leased chronometers from Brookline Instruments on January 1, 2021. Brookline Instruments manufactured the chronometers at a cost of $180,000. The chronometers have a fair value of $225,154. Appropriate adjusting entries are made quarterly. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease tern Quarterly lease payments Economic life of asset Estimated residual value of chronometers at end of lease term Interest rate charged by the lessor 5 years (20 quarterly periods) $13,092 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter. 6 years $10,105 84 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 is not complete. Complete this question by entering your answers in the tabs below.

Newton Labs leased chronometers from Brookline Instruments on January 1, 2021. Brookline Instruments manufactured the chronometers at a cost of $180,000. The chronometers have a fair value of $225,154. Appropriate adjusting entries are made quarterly. (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease tern Quarterly lease payments Economic life of asset Estimated residual value of chronometers at end of lease term Interest rate charged by the lessor 5 years (20 quarterly periods) $13,092 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter. 6 years $10,105 84 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 is not complete. Complete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, 2024, Nath-Langstrom Services, Incorporated, a computer software training firm, leased several computers under a two-year operating lease agreement from Computer World Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $95, 000 and were expected to have a useful life of five years with no residual value. Both firms record amortization and depreciation semiannually. 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: Prepare appropriate journal entries recorded by Nath - Langstrom Services for the first year of the lease. Prepare appropriate journal entries recorded by Computer World Leasing for the first year of the lease.
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