Question
In: Accounting
On June 30, 2018, Georgia-Atlantic, Inc., leased warehouse equipment from IC Leasing Corporation. The lease agreement...
On June 30, 2018, Georgia-Atlantic, Inc., leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $403,067 over a five-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 8%, the same rate IC used to calculate lease payment amounts. IC purchased the equipment from Builders, Inc.. at a cost of $3.4 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required: 1. What pretax amounts related to the lease would IC report in its balance sheet at December 31, 2018?
2. What pretax amounts related to the lease would IC report in its income statement for the year ended December 31, 2018?
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Expert Solution
for formulas and refrences, refer the image below -
ekkarill92 answered 7 months agoRelated Solutions
On June 30, 2018, Georgia-Atlantic, Inc., leased warehouse equipment from IC Leasing Corporation. The lease agreement...
On June 30, 2018, Georgia-Atlantic, Inc., leased warehouse
equipment from IC Leasing Corporation. The lease agreement calls
for Georgia-Atlantic to make semiannual lease payments of $779,224
over a three-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 9%, the same rate IC used to
calculate lease payment amounts. IC purchased the warehouse from
Builders, Inc.. at a cost of $4.2 million. (FV of $1, PV of...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $478,550 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 12%, the same rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
at the end of each fiscal year. The fair value...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $779,353 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 12%, the same rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
at the end of each fiscal year. The fair value...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $468,683 over
a five-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 rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
at the end of each fiscal year. The fair value...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $681,229 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 8%, the same rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
at the end of each fiscal year. The fair value...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $677,829 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 rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
at the end of each fiscal year. The fair value...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $604,355 over
a five-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 rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
at the end of each fiscal year. The fair value...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
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borrowing rate is 8%, the same rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
at the end of each fiscal year. The fair value...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse facility from IC Leasing Corporation. The lease...
On June 30, 2018, Georgia-Atlantic, Inc., leased a warehouse
facility from IC Leasing Corporation. The lease agreement calls for
Georgia-Atlantic to make semiannual lease payments of $486,269 over
a four-year lease term, payable each June 30 and December 31, with
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borrowing rate is 10%, the same rate IC uses to calculate lease
payment amounts. Depreciation is recorded on a straight-line basis
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On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse equipment from IC Leasing Corporation. The lease...
On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse
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