On June 30, 2018, Georgia-Atlantic, Inc., leased warehouseequipment from IC Leasing Corporation. The lease...

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Accounting

On June 30, 2018, Georgia-Atlantic, Inc., leased warehouseequipment from IC Leasing Corporation. The lease agreement callsfor Georgia-Atlantic to make semiannual lease payments of $779,224over a three-year lease term, payable each June 30 and December 31,with the first payment at June 30, 2018. Georgia-Atlantic’sincremental borrowing rate is 9%, the same rate IC used tocalculate lease payment amounts. IC purchased the warehouse fromBuilders, Inc.. at a cost of $4.2 million. (FV of $1, PV of $1, FVAof $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriatefactor(s) from the tables provided.) Required:
1. What pretax amounts related to the lease would IC report inits balance sheet at December 31, 2018?
2. What pretax amounts related to the lease would IC report inits income statement for the year ended December 31, 2018? (For allrequirements, enter your answers in whole dollars and not inmillions. Round your final answers to nearest whole dollar.)

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Solution Determination of pretax amounts related to the lease IC would report in its balance sheet at Dec 31 2018 Lease receivable at Dec 31 2018 Initial balance4200000 Less June 30 2018 See Answer

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In: AccountingOn June 30, 2018, Georgia-Atlantic, Inc., leased warehouseequipment from IC Leasing Corporation. The lease agreement...On June 30, 2018, Georgia-Atlantic, Inc., leased warehouseequipment from IC Leasing Corporation. The lease agreement callsfor Georgia-Atlantic to make semiannual lease payments of $779,224over a three-year lease term, payable each June 30 and December 31,with the first payment at June 30, 2018. Georgia-Atlantic’sincremental borrowing rate is 9%, the same rate IC used tocalculate lease payment amounts. IC purchased the warehouse fromBuilders, Inc.. at a cost of $4.2 million. (FV of $1, PV of $1, FVAof $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriatefactor(s) from the tables provided.) Required:1. What pretax amounts related to the lease would IC report inits balance sheet at December 31, 2018?2. What pretax amounts related to the lease would IC report inits income statement for the year ended December 31, 2018? (For allrequirements, enter your answers in whole dollars and not inmillions. Round your final answers to nearest whole dollar.)