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 $195,774, 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 amortization 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) ................................................3,000,000 Lease payable (calculated below) ...........................................................3,000,000 Lease payable .....................................................................................195,774 Cash (first payment) ..................................................................................195,774 Calculation of the present value of lease payments $195,774 × 15.32380* = $3,000,000 (rounded) *Present value of an annuity due of $1: n = 20, i = 3% (from Table 6). 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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