Newton Labs leased chronometers from Brookline Instruments on January 1, 2021. Brookline Instruments manufactured the chronometers at a cost of $300,000. The chronometers have a fair value of $375,275. 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.)

Related Information:
Lease term		5 years (20 quarterly periods)
Quarterly lease payments	$	21,821 at Jan. 1, 2021, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter.
Economic life of asset		6 years
Estimated residual value of chronometers at end of lease term	$	16,842
Interest rate charged by the lessor		8%

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.

1.

2.

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No Debit Credit Date General Journal January 01, 2021 Right-of-use asset Lease payable January 01, 2021 Lease payable Cash March 31, 2021 Interest expense Lease payable Cash March 31, 2021 Amortization expense Right-of-use asset No Debit Credit Date General Journal January 01, 2021 Lease receivable Cost of goods sold Sales revenue Equipment January 01, 2021 Cash Lease receivable March 31, 2021 Cash Lease receivable Interest revenue