Eye Deal Optometry leased vision-testing equipment from Insight Machines on January 1, 2024. Insight Machines manufactured the equipment at a cost of $260,000 and lists a cash selling price of $298,814. Appropriate adjusting entries are made quarterly.

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)

Related Information:
Lease term	5	years (20 quarterly periods)
Quarterly lease payments	$19,500	at January 1, 2024, and at March 31, June 30, September 30, and December 31 thereafter
Economic life of asset	5	years
Interest rate charged by the lessor	12%

Required:

1.Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024.

2.Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2024, and on March 31, 2024.