Question

help asap please

On June 30, 2021, Georgia-Atlantic, Inc. leased warehouse equipment from Builders, Inc. The lease agreement calls for Georgia- Atlantic to make semiannual lease payments of $604,152 over a 4-year lease term (also the asset's useful life), payable each June 30 and December 31, with the first payment at June 30, 2021 Georgia-Atlantic's incremental borrowing rate is 10.0%, the same rate Builders used to calculate lease payment amounts. Builders manufactured the equipment at a cost of $3.6 million. (FV of $1. PV of $1. FVA of S1, PVA of 51. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Skipped book Required: 1. Determine the price at which Builders is "selling the equipment (present value of the lease payments) at June 30, 2021 2. What amount related to the lease would Builders report in its balance sheet at December 31, 2021 (ignore taxes)? 3. What line item amounts related to the lease would Builders report in its income statement for the year ended December 31, 2021 ignore taxes)? (For all requirements, enter your answers in whole dollars and not in millions. Round your final answer to the nearest whole dollar) Hint Berences 1 Present value 2 Pretax netreceivable 3 Totalpraxect on net income

Answer 1

1	Present Value	$3,904,763
2	Pretax net receivable	$3,066,489
3	Total pretax effect on net income	$370,030
	Working Notes
	Computation of Present Value of Lease Rentals
	PV = P * (1-(1+(r/p))^-(n*p)/(r/p)
	where,
	PV = Present value of Lease rentals
	P = Value of Lease Rentals
	r = rate of interest
	n = period of lease(in years)
	p = no. of payments during the year
	Value of Lease Rentals (P)	$604,152
	rate of interest ('r.)	10%
	period of lease(in years) (n)	4
	no. of payments during the year (p)	2
	PV = P * (1-(1+(r/p))^-(n*p)/(r/p) ( 604152 * (1-(1+.10/2)^-(4*2)/(.10/2)	$3,904,763
	Computation of pretax income and receivable in 2021
	Period	Beg.Bal.	Lease Rent	Interest	Principle	End Bal.
	Jun-21	$3,904,763	$604,152	$195,238	$408,914	$3,495,849
	Dec-21	$3,495,849	$604,152	$174,792	$429,360	$3,066,489
				$370,030
	Receivable Amount as on December 31,2021					$3,066,489
	Pretax net income					$370,030