Wilson Chemical, Inc., leased a protein analyzer from Newman Lease. Inc. on September 30, 2021. Newman Lease manufactured the machine at a cost of $4.5 million. The five year lease agreement calls for Wilson to make quarterly lease payments of $326,290, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2021. Newman Lease implicit interest rate is 12%. Amortization is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years.

Required:

1. Determine the price at which Newman Lease is selling the equipment (present value of the lease payments) at September 30, 2021.

2. What pretax amounts related to the lease would Wilson and Newman Lease report in its balance sheet at December 31, 2021?

3. What pretax amounts related to the lease would Wilson and Newman Lease report in its income statement for the year ended December 31, 2021?

4. What pretax amounts related to the lease would Wilson and Newman Lease report in its statement of cash flows for the year ended December 31, 2021?