Each of the four independent situations below describes a sales-type lease in which annual lease payments of $11,000 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) 6 6 6 6 Assets useful life (years) 6 7 7 9 Lessors implicit rate (known by lessee) 11 % 11 % 11 % 11 % Residual value: Guaranteed by lessee 0 $ 4,400 $ 2,200 0 Unguaranteed 0 0 $ 2,200 $ 4,400 Purchase option: After (years) none 5 6 3 Exercise price n/a $ 7,200 $ 1,200 $ 3,200 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.)

X Answer is complete but not entirely correct. Situation 1 2 3 4 A. The lessor's: 1. $ 66,000 70,400 X 70,400 69,200 X Total lease payments Gross investment in the lease 2. 66,000 70,400 70,400 69,200 3. Net investment in the lease 46,536 48,888 X 48,888 48,247 B. The lessee's: 4. 66,000 5. Total lease payments Right-of-use asset Lease liability 46,536 X 46,536 X 66,000 46,536 X 46,536 X 66,000 46,536 X 46,536 X 69,200 X 48,247 X 48,247 X 6