Exact Sciences leased machinery from Balboa Capital on 6/30/21. The lease contract requires Exact Sciences to pay semiannual lease payments of $509,761 over a five-year lease term, payable each 6/30 & 12/31, with the first payment on the very first day of the lease term (6/30/21). Exact Science's incremental borrowing rate is 8%. However, Exact Science does not know the implicit rate of interest Balboa Capital uses to calculate its interest revenue on the lease. Amortization is recorded on a straight-line basis at the end of each fiscal year since this lease is classified as a finance/sales-type lease. The fair value of the equipment is $4.3 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the present value of the lease payments at June 30, 2021 that Exact Sciences uses to record the right-of-use asset and lease liability. 2. What pretax amounts related to the lease would Exact Sciences report in its balance sheet at December 31, 2021? 3. What pretax amounts related to the lease would Exact Sciences report in its income statement for the year ended December 31, 2021? (For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole dollar.)

\begin{tabular}{|c|l|l|} \hline 1. & Present value & \\ \hline 2. & Pretax amount for liability & \\ \hline & Pretax amount for right-of-use asset & \\ \hline 3. & Pretax amount for interest expense & \\ \hline & Pretax amount for amortization expense & \\ \hline \end{tabular}