On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse equipmentfrom IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $779,353 over a four-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 12%, 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 $4.1 million. (FV of $1,PV of $1,FVA of $1,PVA of $1,FVAD of $1andPVAD of $1)

Required:

1.Determine the present value of the lease payments at June 30, 2021 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, 2021?

3.What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2021?

1) present value

2) pretax amount of liability

3) pretax for right-of-use asset

4) pretax amount for interest expense

5)pretax amount for amortization expense