Each of the four independent situations below describes a direct financing lease in which annual lease payments of $155,000 are payable at the beginning of each year. Each is a capital lease for the lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

	Situation
	1	2	3	4
Lease term (years)	8	8	9	9
Lessors and lessees discount rate	8%	10%	9%	11%
Residual value:
Guaranteed by lessee	0	$77,500	0	$51,000
Unguaranteed	0	0	$77,500	$104,000

Determine the following amounts at the inception of the lease

		Situation
		1	2	3	4
A	The lessors:
	1. Minimum lease payments	$1,240,000	$1,317,500	$1,395,000	$1,446,000
	2. Gross investment in the lease	1,240,000	1,317,500	1,472,500	1,550,000
	3. Net investment in the lease
B	The lessees:
	4. Minimum lease payments	1,240,000	1,317,500	1,395,000	1,446,000
	5. Leased asset
	6. Lease liability