Intermediate Accounting: E15-9 On June 30, 2013, Georgia-Atlantic, Inc. leased a warehouse

Intermediate Accounting
E15-9 Direct financing lease; lessor; balance sheet and income statement effects
On June 30, 2013, Georgia-Atlantic, Inc. leased a warehouse from IC Leasing Corporation. The lease agrement calls for Georgia-Atlantic to make semiannaual lease payments of $562,907 over 3 year lease term payable on June 30 and December 31,with first payment at June 30, 2013. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC used to calculate the payments. IC purchased the warehouse from Builders, Inc at a cost of $3million.Required:
1. What pretax amounts related to the lease would IC report in its balance sheet at December 31, 2013?
2. What pretax amounts related to the lease would IC report in its income statement at December 31, 2013?
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