On June 30, 2018, Blue, Inc

Essay

On June 30, 2018, Blue, Inc. leased a machine from Big Leasing Corporation. The lease agreement qualifies as a capital lease and calls for Blue to make semiannual lease payments of $281,454 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2018. Blue's incremental borrowing rate is 10%, the same rate Big uses to calculate lease payment amounts.
-The lease agreement qualifies as a sales-type lease without selling profit. Depreciation is recorded on a straight-line basis at the end of each fiscal year.
Required:
Round your answers to the nearest whole dollar amounts.
1. What would be the amounts related to the lease that Big would report in its balance sheet at December 31, 2018? (Ignore income taxes).
2. What would be the amounts related to the lease that Big would report in its income statement for the year ended December 31, 2018? (Ignore income taxes.)