Charles River Hospital leased medical equipment from Plymouth Industries on January 1, 2021. Plymouth Industries manufactured the equipment at a cost of $600,000. The equipment has a fair value of $750,654. Appropriate adjusting entries are made quarterly. Quarterly lease payments 43,641 at Jan 1 2016, and at Mar 31, june 30, sept. 30, and Dec 31 thereafter. Economic life of asset 6 yearsresidual value at end of lease term 33,684interest rate charged by the lessor 8%Required:a. Prepare appropriate journal entries for charles river hospital to record the arrangement at its commencement, January 1,2016, and on march 31,2016.b. Prepare appropriate journal entries for Plymouth Industries to record the arrangement at its commencement, January 1, 2016, and on March 31, 2016.
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