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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
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 $583,375 over a four-year lease term, payable each June 30 and December 31 , with the first payment on June 30,2024 . Georgla-Atlantic's incremental borrowing rate is 12%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-fine basis at the end of each fiscal year. The fair value of the equipment is $3.84 million. Note: Use tobles, Excel, or a financial calculator. (FV of S1. PV of S1. EVA of \$1. PVA of \$1. FVAD of \$1 and PVAD of S1) Required: 1. Determine the present value of the lease payments on June 30, 2024 that Georgia-Atiantic uses to record the right-of-use asset and lease liability. 2. What amount related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)? 3. What amount related to the lease would Georgia-Atlantic 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 your final answers to the nearest whole doltar. Table 4 Present Value of an Ordinary Annuity of $1 TABLE 2 Present value of $1
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