Q3. Lease concepts; finance leases/sales type lease; guaranteed and unguaranteed residual value Each of the four independent situations below describes a direct financing lease in which annual lease payments of $100,000 are payable at the beginning of each year Situation 1 2 3 4 Lease term (years) 8 8 7 7 Lessor's and lessee's discount rate 9% 11% 10% 12% Residual value: Estimated fair value 0 $30,000 $10,000 $30,000 Guaranteed by lessee 0 0 $10,000 $50,000 Situation 1 2 4 The lessor's 1. Lease payments 2. Gross investment in the lease 3. Net investment in the lease lease receivable (PV of Gross investment in the lease The lessee's: 4. Lease payments 5. Right-of-use asset 6. Lease liability pv factor annuity due pv factor of single amount