Question

Chapter 15 - Homework A Seved 19 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, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 0.8 paints 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 lessor 5 years (20 quarterly periods $ 24,002 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter. 6 years $18,525 8% eBook Print 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 References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare appropriate entries for Brookline Instruments to record the arrangement at its commencement, January 1, 2021, and on March 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) View transaction list View journal entry worksheet ® No Date General Journal Debit Credit 1 412,783 317,533 January 01, 2021 Lease receivable Cost of goods sold Sales revenue Equipment 400,316 330,000 2 24,002 January 01, 2021 Cash Lease receivable 24,002 3 March 31, 2021 24,002 Cash Lease receivable Interest revenue < Required 1 Required 2

Answer 1

0.02 Calculation Annual Interest Rate - 8% Quarterly Int. Rate 8/1432% = Present Value of Jacar = (1-(1+r) (n-By+1 Pu fachar = { 1 - ( 1 + 0.02 - (20-13 9+1 [=600)"') + 0.02 f 1 Pu fachor= 15.67857 = 16.6785 Quarterly Paymentie $ 24,093 Present Value of quarterly payments = $24,002X 16.6785 part Wel$ 400,317 Journal Entries Date General Journal Account like ($) Debit (s) Credit lan Right to use Alc. 400,317 To lease payable to 400,317 (Being beginning leased 24,002 lease payable Al 224,002 To Cash 24,002 ( Quarterly Rent pay) Interest Eup. Lease Ale Lease payable Alc To cash ($ 400, 317 x2y.) (Quarterly Int. and rent paid) 2021 31 Mar EN

Mar 31 Amorchzahlon Erup Rle 2021 To Right to en ($ 400,317/20) (Amortization of Right to use equipment) Journal Endues in books of Brookline Instruments Date: General Journal Debit Credit Lan Lease receivable 412,784 2021 Cost of goods cold 3/7,533 Sales Revenue 400, 317 Equipment 330,000 24,002 1 Jan 2021 Cash lease receivable 24,002 24,002 3 Mar 2021 Cash lease receivable Int. revenue 16,706 7296 ] 20 Calculation ! lease receivable - (24,00 2 x PVA(24,20) +( 18,525X AU(22,20) 24,002 x ( 1-41+2%3-20x41+274) + 18525¥itz (1+27) (04,002 X 16.6785) + (18,525 X 0.67297 $ 400 317.357 +12466.76925 412789.12625 = $ 412784 ay

Cast of goods sold = cost-Pu of residual value $ 330,000- ( 18,525 XL (1727320 $ 330,000 - 10:67297x 18525) $ 330,00u - 12466.76925 $ $. 317,533.23075 $317,533 Interst Revenue = (412784 24,002) 8% 388,782 X 27 y = $ 1295.6 $7296 lease Receivable 24,002-7296 = 16,706