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On June 30, 2021, Georgia Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments
On June 30, 2021, Georgia Atlantic, Inc. leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $512,709 over a five year lease term (also the asset's useful lifel. payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia Atlantic's incremental borrowing rate is 125, the same rate I used to calculate lease payment amounts. I purchased the equipment from Builders, Inc. at a cost of $4.0 million (FV of St. 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. What pretax amount related to the lease would IC report in its balance sheet at December 31, 2021? 2. What pretax amount related to the lease would IC report in its income statement for the year ended December 31, 20217 (For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole dollar.) Answer is complete but not entirely correct. Pretax amount of met receivable Pretax amount of interest revenue $ 4324 8703 $ 209 238
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