Q2. Each of the four independent situations below describes a direct financing lease in which annual lease payments of $185,000 are payable at the beginning of each year. Each is a capital lease for the lessee. Situation ________________________________________ 1 2 3 4 Lease term (years) 6 6 7 7 Lessors and lessees discount rate 9% 11% 10% 12% Residual value: Guaranteed by lessee 0 $92,500 0 $57,000 Unguaranteed 0 0 $92,500 $128,000 ________________________________________ Determine the following amounts at the inception of the lease 1. The lessor's: 1. Minimum lease payments 2. Gross investment in the lease 3. Net investment in the lease 2. The lessee's: 4. Minimum lease payments 5. Leased asset 6. Lease liability