On June 30, 2013, Blue, Inc., leased equipment from Big Leasing Corporation. The lease agreement qualifies as a direct financing lease and calls for Blue to make semiannual lease payments of $281,453 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2013. Blue's incremental borrowing rate is 10%, the same rate Big uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year.
Required:
1. What would be the pretax amounts related to the lease that Big would report in its balance sheet at December 31, 2013? (Round PV to the nearest $000.)
2. What would be the pretax amounts related to the lease that Big would report in its income statement for the year ended December 31, 2013?

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The Answer of On June 30, 2013, Blue, Inc., leased equipment from Big Leasing Corporation. The lease agreement qualifies as a direct financing lease and calls for Blue to make semiannual lease payments of $281,453 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2013. Blue's incremental borrowing rate is 10%, the same rate Big uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year.
Required:
1. What would be the pretax amounts related to the lease that Big would report in its balance sheet at December 31, 2013? (Round PV to the nearest $000.)
2. What would be the pretax amounts related to the lease that Big would report in its income statement for the year ended December 31, 2013?