Each of the four independent situations below describes a sales-type lease in which annual lease payments of $17,500 are payable at the beginning of each year. Each is a finance 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)		4			4			4			4
Assets useful life (years)		4			5			5			7
Lessors implicit rate (known by lessee)		8	%		8	%		8	%		8	%
Residual value:
Guaranteed by lessee		0		$	7,000		$	3,500			0
Unguaranteed		0			0		$	3,500		$	7,000
Purchase option:
After (years)		none			3			4			3
Exercise price		n/a		$	8,500		$	2,500		$	4,500
Reasonably certain?		n/a			no			no			yes

Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.)

4 4 8% 4 5 8% 4 5 8% 4 7 8% 0 Lease term (years) Asset's useful life (years) Lessor's implicit rate (known by lessee) Residual value: Guaranteed by lessee Unguaranteed Purchase option: After (years) Exercise price Reasonably certain? $ 7,000 0 $ 3,500 $ 3,500 0 $ 7,000 none n/a n/a 3 $ 8,500 4 $ 2,500 3 $ 4,500 yes no no etermine the following amounts at the beginning of the lease: (Round your final answers to nearest who Answer is complete but not entirely correct. Situation 1 2 3 4 $ 70,000 70,000 70,000 81,500 70,000 77,000 77,000 81,500 The lessor's 1. Total lease payments 2. Gross investment in the lease Net investment in the 3. lease The lessee's 4. Total lease payments 5. Right-of-use asset 62,599 67,744 67,744 57,836 X 70,000 62,599 70,000 54,264 X 70,000 62,599 81,500 57,836 Toaco liability 62 599 51 261 62 59a 57 826