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On January 1, 2021, Worcester Construction leased International Harvester equipment from Newton LeaseCorp Newton LeaseCorp purchased the equipment from Wellesley Harvester at a cost of

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On January 1, 2021, Worcester Construction leased International Harvester equipment from Newton LeaseCorp Newton LeaseCorp purchased the equipment from Wellesley Harvester at a cost of $958,158. Worcester's borrowing rate for similar transactions is 10% The lease agreement specified four annual payments of $200,000 beginning January 1, 2021, the beginning of the lease, and one December 31 thereafter through 2023. The useful life of the equipment is estimated to be six years. The present value of those foum payments at a discount rate of 10% is $697,370 On January 1, 2023 (after two years and three payments). Worcester and Newton agreed to extend the lease term by two years. The market rate of interest at that time was 9%. (FV of S1, PV of $1. EVA of $1. PVA of $1. FVAD of $1 and PVAD of 51) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the appropriate entries for Worcester Construction on January 1, 2023, to adjust its lease liability for the lease modificatio 2. Prepare all appropriate entries for Newton LeaseCorp on January 1, 2023, to record the lease modification 3. Prepare all appropriate entries for Worcester Construction on December 31, 2023, related to the lease 4. Prepare all appropriate entries for Newton LeaseCorp on December 31, 2023, related to the lease. 4. Prepare all appropriate entries for Newton LeaseCorp on December 31, 2023, related to the lease. % Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare all appropriate entries for Newton LeaseCorp on January 1, 2023, to record the lease modification. required for a transaction/event, select "No journal entry required" in the first account field. Round your inte final answers to nearest whole dollar.) No Date General Journal Debit Credit January 01, 2023 Deferred sales revenue 200,000 Sales revenue 200,000 1 Required 1 Required 2 Required 3 Required 4 Prepare all appropriate entries for Worcester Construction on December 31, 2023, related to the lease. (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) No Date General Journal Debit Credit 1 December 31, 202 Interest expense Lease payable Cash 45,563 154 437 200,000 2 December 31, 202 Amortization expense Right-of-use asset 126,565 % 126,565

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