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How do I calculate the pretax amount for the right of use asset? Exercise 15-3 Finance lease; lessee; balance sheet and income statement effects [L015-2]

How do I calculate the pretax amount for the right of use asset?

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Exercise 15-3 Finance lease; lessee; balance sheet and income statement effects [L015-2] On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. 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 IC uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The fair value of the warehouse is $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.) Requirec 1. Determine the present value of the lease payments at June 30, 2018 that Georgia-Atlantic uses to record the right-of-use asset and lease liability 2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2018? 3. What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2018? (For all requirements, Enter your answers in whole dollars and not in millions. Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct 3,000,000 $1,996,041 $ 621,855 3. Pretax amount for interest expenseS 121,855 $500,000 Present value Pretax amount for liability Pretax amount for right-of-use asset Pretax amount for amortization expense

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