Each of the four independent situations below describes asales-type lease in which annual lease payments of $100,000 arepayable at the beginning of each year. Each is a finance lease forthe lessee. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1and PVAD of $1) (Use appropriate factor(s) from the tablesprovided.)
| Situation |
| 1 | 2 | 3 | 4 |
| Lease term (years) | 7 | 7 | 8 | 8 |
| Lessor's and lessee's interest rate | 9% | 11% | 10% | 12% |
| Residual value: | | | | |
| Estimated fair value | 0 | $50,000 | $8,000 | $50,000 |
| Guaranteed by lessee | 0 | 0 | $8,000 | $60,000 |
|
Determine the following amounts at the beginning of the lease.(Round your intermediate and final answers to the nearestwhole dollar amount.)
| Situation |
| | 1 | 2 | 3 | 4 |
| A. | The Lesser's | | | | |
| 1. Lease payment | | | | |
| 2. Gross investment in the Lease | | | | |
| 3. Net Investment in the Lease | | | | |
| B. | The Lessee's | | | | |
| 1. Lease payment | | | | |
| 2. Gross investment in the Lease | | | | |
| 3. Net investment in the Lease | | | | |
