Business, 19.05.2020 20:58 jadejordan8888

Wilson Foods Corporation leased a commercial food processor on September 30, 2018. The five-year finance lease agreement calls for Wilson to make quarterly lease payments of $182,722, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Wilson’s incremental borrowing rate is 12%. Wilson records depreciation on a straight-line basis at the end of each fiscal year. Wilson recorded the lease as follows: September 30, 2018 Right-of-use asset (calculated below) 2,800,000 Lease payable (calculated below) 2,800,000 Lease payable 182,722 Cash (first payment) 182,722 Calculation of the present value of lease payments $182,722 × 15.32380* = $2,800,000 (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 Wilson would report in its statement of cash flows for the year ended December 31, 2018?

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Wilson Foods Corporation leased a commercial food processor on September 30, 2018. The five-year fin...