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.)

1 4 4 8% Situation 2 4 5 8% 3 4 5 8% 4 4 7 8% 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? @ 0 $ 7,000 $3,500 $ 3,500 $ 7,000 none n/a n/a 3 $ 8,500 4 $ 2,500 3 $ 4,500 yes no no Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.) Answer is complete but not entirely correct. Situation 1 2 3 4 A. 2. $ 70,000 70,000 62,599 70,000 77,000 67,744 70,000 77,000 The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability 74,500 81,500 71,052 67,744 B. 70,000 62,599 62,599 70,000 62,599 62,599 70,000 62,599 62,599 74,500 X 65,907 65,907