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 $562907 over a three year lease term, payable each June 30 and December 31 with the first payment at June 30 2018. Georgia Atlantics incremental borrowing rate is 10%, the same rate builders used to calculate lease payment amounts. Builders used to calculate lease payment amounts. Builders manufactured at a cost of $2.5 million.

REQUIRED:

1. Determine the price at which builders is selling the equipment (present value of the lease payment) at June 30 2018 ( to the nearest $000)

2. What amounts related to the lease would builders report in its balance sheet at December 31 2018( ignore)

3. What amounts related to the lease would builders report in its income statement for the ended December 31, 2018( ignore taxes)