Practice chap 14

The lease agreement calls for georgia atlantic to

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Unformatted text preview: sing Corporation. The lease agreement calls for Georgia-Atlantic to make • LO15–5 Class work 20 minutes On June (Note: Exercises 15-8, 15-9, and 15-10 are threethree-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2013. s emiannual lease payments of $562,907 over a variations of the same situation.) Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC uses to calculate lease payment amounts. Depreciation is recorded on a straightline basis at the end of each fiscal year. The fair value of the warehouse is $3 million. Required: 1. Determine the present value of the lease payments at June 30, 2013 (to the nearest $000) that Georgia-Atlantic uses to record the leased asset and lease liability. 2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2013? 3. What pretax amounts related to the lease would Georgia-Atlantic report in its income statement for the year ended December 31, 2013? Requirement 1: PV of minimum lease payments D ate Payment Requirement 2 Assets: Reductio n in Lease Interest Liability Payable added $1 due to rounding Requirement 3 Income Statement: On June 30, 2013, Georgia-Atlantic, Inc., leased a warehouse facility from Builders, Inc. The lease agreement calls for Georgia-Atlantic to make s emiannual lease payments of $562,907 over a three-year lease term, payable each June 30 and December 31, with the first payment a...
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This note was uploaded on 03/03/2013 for the course ACC 321 taught by Professor Bukowy during the Spring '10 term at UNC Pembroke.

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