E 15-5 Sales-type lease; lessor; balance sheet and income statement effects On June 30, 2018, Georgia-Atlantic, Inc. leased warehouse equipment from Builders, Inc. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2018. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate Builders used to calculate lease payment amounts. Builders manufactured the equipment at a cost of $2.5 million. 1. Price Builders is "selling" the equipment (present value of the lease payments) at 6/30/18 (to the nearest $000). 2. What amounts related to the lease would Builders report in its balance sheet at 12/31/18. 3. What amounts related to the lease would Builders report in its income statement for the year ended 12/31/18. Requirement 1 - Present Value of the Lease Payments "Selling Price" Requirement 2- Balance Sheet December 31, 2018 Initial Balance of Receivable Ending Balance Receivable Dec. 31, 2018 Requirement 3 - Income Statement December 31, 2018 Total Interest Revenue for 2018 Selling Profit