Answer:
Eye Deal Optometry and Insight Machines
Journal Entries for Eye Deal:
Debit Right of Use Asset $437,424
Credit Lease Liability $437,424
To record the right of use asset and lease liability.
Debit Lease Liability $22,906.44
Debit Interest Expense $1,093.56
Credit Cash $24,000
To record the first lease payment and interest expense.
March 31, 2018:
Debit Lease Liability $22,843.71
Debit Interest Expense $1,156.29
Credit Cash $24,000
To record the second lease payment and interest expense.
Journal Entries for Insight:
January 1, 2018:
Debit Lease Receivable $437,424
Credit Lease Asset $437,424
To record the lease receivable and asset.
Debit Cash $24,000
Credit Lease Receivable $22,906.44
Credit Interest Revenue $1,093.56
To record the first lease receipt and interest revenue.
March 31, 2018:
Debit Cash $24,000
Credit Lease Receivable $22,843.71
Credit Interest Revenue $1,156.29
To record the second lease receipt and interest revenue.
Explanation:
a) Data and Calculations:
Cost of equipment = $320,000
Cash selling price (fair market value/PV) = $437,424
Lease term = 5 years (20 quarterly periods)
Quarterly lease payments = $24,000
Lease Schedule for the first year:
Period              PV                        PMT              Interest         FV
Jan. 1, 2018	$437,424.00	$24,000.00	$1,093.56	$462,517.56
Mar. 31            $462,517.56	$24,000.00	$1,156.29	$487,673.85
June 30          $487,673.85	$24,000.00	$1,219.18         $512,893.04
Sept. 30          $512,893.04	$24,000.00	$1,282.23	$538,175.27
Dec. 31            $538,416.17	$24,000.00	$1,406.04	$563,822.21