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Each of the four independent situations below describes a sales-type lease in which annual lease payments of $17,000 are payable at the beginning of each
Each of the four independent situations below describes a sales-type lease in which annual lease payments of $17,000 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) Asset's useful life (years) 2 2 2 2 2 3 3 5 Lessor's implicit rate (known by lessee) 9% 9% 9% 9% Residual value: Guaranteed by lessee 0 $ 6,800 $ 3,400 0 Unguaranteed 0 0 $ 3,400 $ 6,800 Purchase option: After (years) none 1 2 3 Exercise price Reasonably certain? n/a n/a $ 8,400 $2,400 no no $4,400 yes Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.) A. The lessor's: Situation 1 2 3 4 1. Total lease payments $ 34,000 34,000 34,000 55,400 2. Gross investment in the lease 34,000 40,800 40,800 55,400 3. Net investment in the lease B. The lessee's: 4. Total lease payments 34,000 34,000 34,000 5. Right-of-use asset 6. Lease liability
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