Each of the four independent situations below describes a sales-type lease in which annual lease payments of $19,000 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)		4			4			4			4
Assets useful life (years)		4			5			5			7
Lessors implicit rate (known by lessee)		12	%		12	%		12	%		12	%
Residual value:
Guaranteed by lessee		0		$	7,600		$	3,800			0
Unguaranteed		0			0		$	3,800		$	7,600
Purchase option:
After (years)		none			3			4			3
Exercise price		n/a		$	8,800		$	2,800		$	4,800
Reasonably certain?		n/a			no			no			yes

Determine the following amounts at the beginning of the lease:

A. The lessor's

Situation

1 2 3 4

1) Total Lease Payments : _ _ _ _

2) Gross investment in the lease: _ _ _ _

3) Net investment in the lease: _ _ _ _

B. The lessee's

1 2 3 4

4) Total lease Payments: _ _ _ _

5) Right-of-use asset: _ _ _ _

6) Lease Liability: _ _ _ _