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.)

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 3 4 4 5 5 8% 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 0 $3,500 $3,500 0 $7,000 none n/a n/a 3 $8,500 no 4 $2,500 no 3 $4,500 yes Determine the following amounts at the beginning of the lease: (Round your final answers to nearest whole dollar.) Situation 1 2 3 $ 70,000 70,000 62,599 70,000 77,000 70,000 77,000 67,744 67,744 A. The lessor's: 1. Total lease payments 2. Gross investment in the lease 3. Net investment in the lease B. The lessee's: 4. Total lease payments 5. Right-of-use asset 6. Lease liability 70,000 62,599 62,599 70,000 62,599 70,000 62,599 62,599 62,599