Each of the independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit interest rate.

Situation

$\backslash$table$[[$Situation$,],[$Lease term,$1$ Lessee,$2$ Lessor$],[$Lessor$\text{'}$s desired rate of return,$10yrs,20yrs.],[$Lessee$\text{'}$s incremental borrowing rate,$10\%,12\%$