Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

please show all work using excel Exercise 15-3 (Algo) Finance lease; lessee; balance sheet and income statement effects (L015-2] On June 30, 2021, Georgia-Atlantic, Inc.

please show all work using excel
image text in transcribed
Exercise 15-3 (Algo) Finance lease; lessee; balance sheet and income statement effects (L015-2] On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $648,358 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 10%, 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 $4,4 million (EV of $1. PV of $1. EVA of $1. PVA - $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided) 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 fease 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, (For all requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole dollar.) 2021? $ 4,400,000 3,290,866 $ 1. Present value 2. Pretax amount for liability Pretax amount for right-of-use asset 3. Pretax amount for interest expense Pretax amount for amortization expense $ 187,582

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Cases An Interactive Learning Approach

Authors: Steven M Glover, Douglas F Prawitt

4th Edition

0132423502, 978-0132423502

Students also viewed these Accounting questions