AT January 1, 2018 Insight company leased a machine from Riverside Manufacturer. The following information pertains to the lease:

Lease Term: 3 years

Annual lease payments beginning January 1, 2018 and at each December 31 thereafter through 2019: $50,000

Cost of the machine on Riverside's book: $102,971

Riverside Manufacture's implicit rate (known by Insight): 5%

On December 31, 2020 the machine is revert back to riverside. Both companies use straight-line depreciation/amortization.

Period	Present Value of $1 at 5%	Present Value of ordinary annuity of $1 at 5%	Present Value of annuity due of $1 at 5%
3	0.86384	2.72325	2.85941
5	0.78353	4.32948	4.54595

1. Assume the useful life of equipment is 3 years and the lease is classified as a finance lease/ sales-type lease

A. What pretax amount related to the lease would insight report in its balance sheet at December 31, 2018?

B. What pretax amount related to the lease would insight report in its Income Statement at December 31, 2018?

C. What pretax amount related to the lease would insight report in its Statement of Cash Flows at December 31, 2018?

D. What pretax amount related to the lease would Riverside report in its Income Statement at December 31, 2018?

2. Assume the useful life of equipment is 5 years and the lease is classified as an operating lease

A. What pretax amount related to the lease would insight report in its Income Statement at December 31, 2018?

B. What pretax amount related to the lease would insight report in its Statement of Cash Flows at December 31, 2018?