For each of the three independent situations below determine the amount of the annual lease payments. Each describes a capital lease in which annual lease payments are payable at the beginning of each year. Each lease agreement contains an option that permits the lessee to acquire the leased asset at an option price that is sufficiently lower than the expected fair value that the exercise of the option appears reasonably certain. (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.)

Situation1 2 3

Lease term (years)4123

Lessors rate of return11%12%10%

Fair value of leased asset $64,000$422,000$187,000

Lessors cost of leased asset $52,000$422,000$147,000

Bargain purchase option:

Option price $12,000$52,000$24,000

Exercisable at end of year:442

Determine the annual lease payments for each situation: