Neri Foods Corporation leased a commercial food processor on September 30, 2024. The five-year finance lease agreement calls for Neri to make quarterly lease payments of $195,774, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2024. Neri’s incremental borrowing rate is 12%. Neri records amortization on a straight-line basis at the end of each fiscal year. Neri recorded the lease as follows:

Required:
What would be the pretax amounts related to the lease that Neri would report in its statement of cash flows for the year ended December 31, 2024?

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September 30, 2024 Right-of-use asset (calculated below).. Lease payable (calculated below). Lease payable....... Cash (first payment)........ 3,000,000 195,774 3,000,000 195,774