Each of the four independent situations below describes a sales-type lease in which annual lease payments of $10,000 are payable at the beginning of each year. Each is a finance lease for the lessee. Determine the following amounts at the beginning of the lease.
A. The lessor’s
1. Lease payments
2. Gross investment in the lease
3. Net investment in the lease
B. The lessee’s
4. Lease payments
5. Right-of-use asset
6. Lease liability

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Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? 1 4 4 11% $0 $0 none n/a n/a 2 4 5 11% Situation $4,000 $0 3 $7,000 no 3 4 5 11% $2,000 $2,000 4 $1,000 no 4 4 7 11% $0 $4,000 3 $3,000 yes