Neri Foods Corporation leased a commercial food processor on September 30, 2024. The five-year finance lease agreement calls for Neri to make quarterly lease payments of $274,083, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2024. Neri's incremental borrowing rate is 12%. Neri records amortization on a straight-line basis at the end of each fiscal year. Neri recorded the lease as follows: September 30, 2024 General Journal Right-of-use asset (calculated below) Lease payable (calculated below) Lease payable Cash (first payment) Calculation of the present value of lease payments $274,083 × 15.3238* = $4,200,000 (rounded) *Present value of an annuity due of $1: n = 20, i = 3% Required: What would be the pretax amounts related to the lease that Neri would report in its statement of cash flows for the year ended December 31, 2024? Note: Cash outflows should be indicated with a minus sign. Do not round your intermediate calculations. Enter your answers in whole dollars and not in millions. Debit 4,200,000 Credit 4,200,000 274,083 274,083

Neri Foods Corporation leased a commercial food processor on September 30, 2024. The five-year finance lease agreement calls for Neri to make quarterly lease payments of $274,083, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2024. Neri's incremental borrowing rate is 12%. Neri records amortization on a straight-line basis at the end of each fiscal year. Neri recorded the lease as follows: September 30, 2024 General Journal Right-of-use asset (calculated below) Lease payable (calculated below) Lease payable Cash (first payment) Calculation of the present value of lease payments $274,083 × 15.3238* = $4,200,000 (rounded) *Present value of an annuity due of $1: n = 20, i = 3% Required: What would be the pretax amounts related to the lease that Neri would report in its statement of cash flows for the year ended December 31, 2024? Note: Cash outflows should be indicated with a minus sign. Do not round your intermediate calculations. Enter your answers in whole dollars and not in millions. Debit 4,200,000 Credit 4,200,000 274,083 274,083

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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