On June 30, 2021, Georgia-Atlantic, Inc. leased warehouseequipment from Builders, Inc. The lease agreement calls forGeorgia-Atlantic to make semiannual lease payments of $545,210 overa 4-year lease term (also the asset’s useful life), payable eachJune 30 and December 31, with the first payment at June 30, 2021.Georgia-Atlantic's incremental borrowing rate is 10.0%, the samerate Builders used to calculate lease payment amounts. Buildersmanufactured the equipment at a cost of $3.2 million. (FV of $1, PVof $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)(Use appropriate factor(s) from the tablesprovided.)

Required:
1. Determine the price at which Builders is“selling” the equipment (present value of the lease payments) atJune 30, 2021.
2. What amount related to the lease would Buildersreport in its balance sheet at December 31, 2021 (ignoretaxes)?
3. What line item amounts related to the leasewould Builders report in its income statement for the year endedDecember 31, 2021 (ignore taxes)?
(For all requirements, enter your answers in whole dollarsand not in millions. Round your final answer to the nearest wholedollar.)

1.	Present Value
2.	Amount to be reported on the balance sheet
3.	Amount to be reported in the income statement