Newton Labs leased chronometers from Brookline Instruments on January 1, 2021. Brookline Instruments manufactured the chronometers at a cost of $220,000. The chronometers have a fair value of $252,049. 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	$	16,002 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	$	12,351
Interest rate charged by the lessor		12%

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.

Answers that were confirmed as correct are filled in.

Req 1
No	Date	General Journal	Debit	Credit
1	January 01,2021	Right-of-use asset	?	?
		Lease payable	?	?
2	January 01,2021	Lease payable	16002
		Cash		16002
3	March 31,2021	Interest expense	?	?
		Lease payable	?	?
		Cash		16002
4	March 31,2021	Amortization expense	?	?
		Right-of-use asset	?	?
Req 2
No	Date	General Journal	Debit	Credit
1	January 01,2021	Lease receivable	?	?
		Cost of goods sold	213162
		Sales revenue	?	?
		Equipment		220000
2	January 01,2021	Cash	16002
		Lease receivable		16002
3	March 31,2021	Cash	16002
		Lease receivable	?	?
		Interest revenue	?	?