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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Vishnu
Transcribed Image Text:Newton Labs leased chronometers from Brookline Instruments on January 1, 2024. Brookline Instruments manufactured the
chronometers at a cost of $170,000. The chronometers have a fair value of $194,763. Appropriate adjusting entries are made quarterly.
Related Information:
Lease term
Quarterly lease payments
Economic life of asset
Estimated residual value of chronometers at end of
5 years (20 quarterly periods)
$ 12,365 at January 1, 2024, and at March 31, June
30, September 30, and December 31 thereafter.
6 years
$ 9,544
12%
lease term
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.
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