Each of the four independent situations below describes a direct financing lease in which annual lease payments of $16,500 are payable at the beginning of each year. Each is a capital lease for the lessee.

	Situation
		1			2			3			4
Lease term (years)		5			5			5			5
Assets useful life (years)		5			6			6			6
Lessors implicit rate (known by lessee)		11	%		11	%		11	%		11	%
Lessees incremental borrowing rate		11	%		12	%		11	%		12	%
Residual value:
Guaranteed by lessee		0		$	5,300			0			0
Guaranteed by third party		0			0		$	5,300			0
Unguaranteed		0			0			0		$	5,300

Determine the following amounts at the inception of the lease:

.	The lessors:
	1.	Minimum lease payments	$82,500	87,800	87,800	82,500
	2.	Gross investment in the lease	82,500	87,800	87,800	87,800
	3.	Net investment in the lease
B.	The lessees:
	4.	Minimum lease payments
	5.	Leased asset
	6.	Lease liability