Biggest Loser Chemical (BL) Inc leased a protein analyzer on Sept 30, 2015. The five year lease agreement calls for (BL) to make quarterly lease payments of $391,548, payable each Sept 30, Dec 31, March 31, and June 30 with the first payment at Sept 30, 2015. BL's incremental borrowing rate is 12% Depreciation is recorded on a straight line basis at the end of each fiscal year. The useful life of the equipment is five years.

1. Determine the present value of the lease payments at Sept 30, 2015.

2. What pretax amounts related to the lease would BL report on the balance sheet at 12/31/15?

3. What pretax amounts related to the lease would BL report in its income statement for the year ended Dec 31, 2015?