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.

	Situation
	1	2	3	4
Lease term (years)	4	7	5	8
Lessors rate of return	10%	11%	9%	12%
Fair value of lease asset	$50,000	$350,000	$75,000	$465,000
Lessors 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:

For each situation, determine:

The amount of the annual lease payments as calculated by the lessor.

The amount the lessee would record as a right-of-use asset and a lease liability.