Each of the four independent situations below describes a sales-type lease in which annual lease payments of $12,000 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)		5			5			5			5
Assets useful life (years)		5			6			6			8
Lessors implicit rate (known by lessee)		13	%		13	%		13	%		13	%
Residual value:
Guaranteed by lessee		0		$	4,800		$	2,400			0
Unguaranteed		0			0		$	2,400		$	4,800
Purchase option:
After (years)		none			4			5			3
Exercise price		n/a		$	7,400		$	1,400		$	3,400
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.)

ences Determine the following amounts at the beginning of the lease: (Round your final answers to n Situation 2 3 4 A. The lessor's: $ 60,000 1. Lease payments 64,800 2. Gross investment in the lease 60,000 3. Net investment in the lease B. The lessee's: 4. Lease payments 60,000 5. Right-of-use asset 6. Lease payable :1: Prev 2 of 4 Next