Each of the four independent situations below describes a lease requiring annual lease payments of $30,000.

	Situation 1	Situation 2	Situation 3	Situation 4
Lease term (years)	4	4	4	4
Asset's useful life (years)	6	6	5	6
Asset's fair value	$132,000	$114,000	$129,000	$115,000
Bargain purchase option?	No	No	Yes	No
Annual lease payments	Beg. of yr.	End of yr.	Beg. of yr.	End of yr.
Lessor's implicit rate (known by lessee)	5%	6%	6%	5%
Lessee's incremental borrowing rate	5%	5%	5%	5%

Required: For each situation, determine the appropriate lease classification by the lessee and indicate why. Round your answers to the nearest whole dollar amounts.