A lease agreement that qualifies as a finance lease calls forannual lease payments of $50,000 over a four-year lease term (alsothe asset’s useful life), with the first payment at January 1, thebeginning of the lease. The interest rate is 7%. (FV of $1, PV of$1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Useappropriate factor(s) from the tables provided.) Required: c. Ifthe lessee’s fiscal year is the calendar year, what would be thepretax amounts related to the lease that the lessee would report inits income statement for the first year ended December 31?
