Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessors implicit rate of return. (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)		4			7			5			8
Lessor's rate of return		10	%		11	%		9	%		12	%
Fair value of lease asset	$	50,000		$	350,000		$	75,000		$	465,000
Lessor's cost of lease asset	$	50,000		$	350,000		$	45,000		$	465,000
Residual value:
Estimated fair value		0		$	50,000		$	7,000		$	45,000
Guaranteed fair value		0			0		$	7,000		$	50,000

Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar amount.)

My answer:

Situation 1:

a. n = 4 & i = 10% = 3.48685 (use table 6)

50,000 / 3.48685 = 14,339.59017 (lease payment)

b. 14,339.59017 * 3.48685 = 50,000 (right-of-use asset/lease payable)

Situation 2:

a. n = 7 & I = 11% = 0.48166 (use table 2)

50,000 * 0.48166 = 24,083

350,000 - 24,083 = 325,917

n = 7 & i = 11% = 5.23054 (use table 6)

325,917 / 5.23054 = 62,310.39243 (lease payment)

b. 62,310 * 5.23054 = 325,917 (right-of-use asset/lease payable)

Situation 3:

a. n = 5, i = 9% = 0.64993 (use table 2)

7,000 * 0.64993 = 4,549.51

75,000 - 4,549.51 = 70,450.49

n = 5, i = 9% = 4.23972 (use table 6)

70,450.49 / 4.23972 = 16,616.77894 (lease payment)

b. 16,616.77894 * 4.23972 = 70,450.49001 (right-of-use asset/lease payable)

Situation 4:

a. n = 8, i = 12% = 0.40388 (use table 2)

(45,000 50,000) * 0.40388 = 2,019.4

50,000 * 0.40388 = -20,194 (new step)

465,000 (2,019.4 + 20,194) = 442,786.6.

n = 8, i = 12% = 5.56376 (use table 6)

442,786.6 / 5.56376 = 79,584.05826 (lease payment)

b. 79,584.05826 * 5.56376 = 442,786.2758 (right-of-use asset/lease payable)

(45,000 50,000) * 0.40388 = 2,019.4

442,786.2758 + 2,019.4 = 444,805.6758

I only need help on Situation 4 Lease Payments. All the other answers are correct. Why is Situation 4, Lease Payments incorrect? What is the correct answer and why? Please do not change the correct answers (this is my second time posting/asking this question).