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Neri Foods Corporation leased a commercial food processor on September 30, 2024. The five-year finance lease agreement calls for Neri to make quarterly lease payments
Neri Foods Corporation leased a commercial food processor on September 30, 2024. The five-year finance lease agreement calls for Neri to make quarterly lease payments of $195,774, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2024. Neri's incremental borrowing rate is 12%. Neri records amortization on a straight-line basis at the end of each fiscal year. Neri recorded the lease as follows: September 30, 2024 Calculation of the present value of lease payments $195,77415.32380=$3,000,000 (rounded) *Present value of an annuity due of $1:n=20,i=3% Required: What would be the pretax amounts related to the lease that Neri would report in its statement of cash flows for the year ended December 31, 2024? Note: Cash outflows should be indicated with a minus sign. Do not round your intermediate calculations. Enter your answers in whole dollars and not in millions
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