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On June 30,2011 Georgia-Atlantic, Inc, leased a warehouse facility from IC Leasing Corporation. The lease agreement call for Georgia-Atlantic to make semiannual lease payments of $402,477 over a fice year lease term, payable each June 30 and December 31, with the first payment at June 30, 2011. Georgia-Atlantic's incremental borrowing rate is 12%, the same reate IC used to calulate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The fair value of the warehouse is $3.14 million (use table 4)
Required:(1) Determine the present value of the lease payments at June 30, 2011 that Georgia-Atlantic used to record the leased asset and lease liability..What is the present value.(2) What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2011...... Liability and Asset. (3) What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2011

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M949802

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