Exercise $15-3($Algo$)$ Finance lease; lessee; balance sheet and income statement effects $[$LO$15-2]$

On June $30,2024,$ Georgia$-$Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement

calls for Georgia$-$Atlantic to make semiannual lease payments of $$681,229$ over a four$-$year lease term, payable each June $30$ and

December $31,$ with the first payment on June $30,2024.$ Georgia$-$Atlantic's incremental borrowing rate is $8\%,$ the same rate IC uses to

calculate lease payment amounts. Amortization is recorded on a straight$-$line basis at the end of each fiscal year. The fair value of the

equipment is $$4\mathrm{.}77$ million.

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$FVA of $$1,$ PVA of $$1,$FVAD of $$1$ and PVAD of $$1)$

Required:

Determine the present value of the lease payments on June $30,2024$ that Georgia$-$Atlantic uses to record the right$-$of$-$use asset

and lease liability.

What amount related to the lease would Georgia$-$Atlantic report in its balance sheet at December $31,2024($ignore taxes$)?$

What amount related to the lease would Georgia$-$Atlantic report in its income statement for the year ended December $31,2024$

$($ignore taxes$)?$

Note: For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole

dollar.On June $30,2024,$ Georgia$-$Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia$-$Atlantic to make semiannual lease payments of $$681,229$ over a four$-$year lease term, payable each June $30$ and December $31,$ with the first payment on June $30,2024.$ Georgia$-$Atlantic's incremental borrowing rate is $8\%,$ the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight$-$line basis at the end of each fiscal year. The fair value of the equipment is $$4\mathrm{.}77$ million.

Note: Use tables, Excel, or a financial calculator.$($FV of $$1,$PV of $$1,$FVA of $$1,$PVA of $$1,$FVAD of $$1$and$$PVAD of $$1)$

Required:

Determine the present value of the lease payments on June $30,2024$ that Georgia$-$Atlantic uses to record the right$-$of$-$use asset and lease liability.

What amount related to the lease would Georgia$-$Atlantic report in its balance sheet at December $31,2024($ignore taxes$)?$

What amount related to the lease would Georgia$-$Atlantic report in its income statement for the year ended December $31,2024($ignore taxes$)?$

Note: For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole dollar.