Each of the four independent situations below describes a sales-type lease in which annual lease payments of $12,500 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.)

4 1 3 3 Situation 2 3 3 3 4. 4 mo 8% 8% 8% 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 $5,000 $2,500 0 0 $2,500 $5,000 none 2 3 3 n/a $7,500 $1,500 $3,500 n/a no yes no Situation 1 2 3 $ 37,500 37,500 37,500 45,000 37,500 39,000 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