On June 30, 2021, C, Inc. leased a machine from D Leasing Corporation. The lease agreement calls for C to make semiannual lease payments of $306,963 over a three-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2021. C's incremental borrowing rate is 12%, the same rate D uses to calculate lease payment amounts. Depreciation is recorded on a straight-line basis at the end of each fiscal year. D constructed the machine at a cost of $1,300,000.
1. Determine the price at which D is selling the machine (present value of the lease payments) at June 30, 2021 (to the nearest $000).
2. What would be the amounts related to the lease that D would report in its balance sheet at December 31, 2021? (Ignore taxes.)
3. What would be the amounts related to the lease that D would report in its income statement for the year ended December 31, 2021? (Ignore taxes.)