On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $604,152 over a four-year lease term (also the assets useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Incorporated at a cost of $4.1 million.

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Required:

1. What amount related to the lease would IC report in its balance sheet on December 31, 2024 (ignore taxes)?
2. What amount related to the lease would IC report in its income statement for the year ended December 31, 2024 (ignore taxes)?

Note: For all requirements, enter your answers in whole dollars and not in millions. Round the intermediate calculation and final answers to the nearest whole dollar.

On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from Builders, Incorporated The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $463,866 over a 4-year lease term (also the assets useful life), payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 11.0%, the same rate Builders used to calculate lease payment amounts. Builders manufactured the equipment at a cost of $2.6 million.

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Required:

1. Determine the price at which Builders is selling the equipment (present value of the lease payments) on June 30, 2024.
2. What amount related to the lease would Builders report in its balance sheet on December 31, 2024 (ignore taxes)?
3. What line item amounts related to the lease would Builders report in its income statement for the year ended December 31, 2024 (ignore taxes)?Note: For all requirements, enter your answers in whole dollars and not in millions. Round the intermediate calculation and final answers to the nearest whole dollar.

\begin{tabular}{|l|l|} \hline 1. Pretax amount of net receivable & \\ \hline 2. Pretax amount of interest revenue & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline 1. Present value & \\ \hline 2. Pretax net receivable \\ \hline 3. Total pretax effect on net income & \\ \hline \end{tabular}