On June 30, 2018, Georgla-Atlantic, Inc., leased a warehouse facllity from IC Le

Question

On June 30, 2018, Georgla-Atlantic, Inc., leased a warehouse facllity from IC Leasing Corporation. The lease agreement calls for Georgla-Atlantic to make semlannual lease payments of $486,269 over a four-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2018. Georgia-Atlantic's incremental borrowing rate is 10%, the same te IC uses to calculate lease payment amounts. Depreclation is recorded on a stralght-line basis at the end of each fiscal year. The falr value of the warehouse is $3.3. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriete factor(s) from the tables provided.) Required 1. Determine the present value of the lease payments at June 30, 2018 that Georgla-Atlantic uses to record the right-of-use asset and lease liability. 2. What pretax amounts related to the lease would Georgla-Atlantic report In Its balance sheet at December 31, 2018? 3. What pretax amounts related to the lease would Georgla-Atlantic report in lts Income statement for the year ended December 31, 2018? For all requirements, enter your answers In whole dollars and not In mllions. Round your final answer to nearest whole dollar.) 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

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5% Year PV 5% Lease Payment PV Of Lease payment Date Payment Interest Lease lowered by Lease Liability 0 1.0000 486269 486269 30-Jun-18 3299997 1 0.9524 486269 463113 30-Jun-18 486269 0 486269 2813728 2 0.9070 486269 441060 31-Dec-18 486269 140686 345583 2468145 3 0.8638 486269 420057 4 0.8227 486269 400055 5 0.7835 486269 381004 6 0.7462 486269 362861 7 0.7107 486269 345582 3300000 1. Present Value 3300000 2. Pretax Amount for Liability 2468145 Pretax Amount of Right to use asset 2887500 3300000-412500 Dep 3. Pretax amount for Interest Exp 140686 Pretax Amount for Amortization 412500 (3300000/4 for Half year)

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