Each of the three independent situations below describes a non-operating lease in which annual lease payments are payable at the beginning of each year. The Lessee is aware of the Lessors implicit rate of return:

Situation

	1	2	3
Lease Term (years)	10	20	4
Lessor rate of return	11%	9%	12%
Lessees incremental borrowing rate	12%	10%	11%
Fair value of Leased Asset	$600,000	$980,000	$185,000

Requirements: For each situation, determine:

A). The amount of the annual lease payments as calculated by the Lessor.

B). The amount the Lessee would record as an asset and liability.