On June 30, 2024, Blue, Incorporated leased a machine from Large Leasing Corporation. The lease agreement calls for Blue to make semiannual lease payments of $180,194 over a five-year lease term, payable each June 30 and December 31, with the first payment on June 30, 2024. Blue's incremental borrowing rate is 8%, the same rate Big uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. Large constructed the machine at a cost of $1,268,000. 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 price at which Large is "selling" the machine (present value of the lease payments) on June 30, 2024. 2. What would be the amounts related to the lease that Large would report in its balance sheet at December 31, 2024? (Ignore taxes.) 3. What would be the amounts related to the lease that Large would report in its income statement for the year ended December 31, 2024? (Ignore taxes.) Note: For all the requirements, round final answers to the nearest whole dollar amounts. Drecept value

On June 30, 2024, Blue, Incorporated leased a machine from Large Leasing Corporation. The lease agreement calls for Blue to make semiannual lease payments of $180,194 over a five-year lease term, payable each June 30 and December 31, with the first payment on June 30, 2024. Blue's incremental borrowing rate is 8%, the same rate Big uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. Large constructed the machine at a cost of $1,268,000. 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 price at which Large is "selling" the machine (present value of the lease payments) on June 30, 2024. 2. What would be the amounts related to the lease that Large would report in its balance sheet at December 31, 2024? (Ignore taxes.) 3. What would be the amounts related to the lease that Large would report in its income statement for the year ended December 31, 2024? (Ignore taxes.) Note: For all the requirements, round final answers to the nearest whole dollar amounts. Drecept value

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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