Natick Industries leased high$-$tech instruments from Framingham Leasing on January $1,2024.$ Natick has the option to renew the lease at the end of two years for an additional three years. Natick is subject to a $$40,000$ penalty after two years if it fails to renew the lease. Framingham Leasing purchased the equipment from Waltham Machines at a cost of $$266,855.$

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 $2$ years $(8$ quarterly periods$)$

Lease renewal option for an additional $3$ years $(12$ quarterly periods$)$

Quarterly lease payments $$16,000$ 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 $8\%$

Required:

Prepare appropriate entries for Natick Industries from the beginning of the lease through March $31,2024.$ Appropriate adjusting entries are made quarterly.