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31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 8%, the same rate IC uses to se payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the is $4.32 million. ables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) mine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use asset ase liability. amount related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)? amount related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2024 e taxes)? Il requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole

31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 8%, the same rate IC uses to se payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the is $4.32 million. ables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) mine the present value of the lease payments on June 30, 2024 that Georgia-Atlantic uses to record the right-of-use asset ase liability. amount related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2024 (ignore taxes)? amount related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2024 e taxes)? Il requirements, enter your answers in whole dollars and not in millions. Round your final answers to the nearest whole

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $512,132 over a five-year lease term, payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 8%, 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 $4.32 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 present value of the lease payments on June 30, 2024 that Georgia-Atlantic 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 dollar. > Answer is complete but not entirely correct. 1. Present value $ 3,890,522 X 2. Pretax amount for liability $ 3,890,522 X 2. Pretax amount for right-of-use asset $ 3,890,522 3. Pretax amount for interest expense $ 155,621 X 3. Pretax amount for amortization expense $ 864,000 X
Transcribed Image Text: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 $512,132 over a five-year lease term, payable each June 30 and December 31, with the first payment on June 30, 2024. Georgia-Atlantic's incremental borrowing rate is 8%, 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 $4.32 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 present value of the lease payments on June 30, 2024 that Georgia-Atlantic 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 dollar. > Answer is complete but not entirely correct. 1. Present value $ 3,890,522 X 2. Pretax amount for liability $ 3,890,522 X 2. Pretax amount for right-of-use asset $ 3,890,522 3. Pretax amount for interest expense $ 155,621 X 3. Pretax amount for amortization expense $ 864,000 X
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