Each of the four independent situations below describes a sales-type lease in wh

Question

Each of the four independent situations below describes a sales-type lease in which annual lease payments of $10,000 are payable at the beginning of each year. Each is a finance lease for the lessee. (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.)

  
Determine the following amounts at the beginning of the lease (Round your final answers to nearest whole dollar.):

This is what I have so far. The missing blanks are the answers i can't get.

PLEASE SHOW WORK SO I CAN UNDERSTAND HOW TO COMPLETE THE QUESTIONS. THANKS. :)

Situation 1 2 3 4 Lease term (years) 4 4 4 4 Asset’s useful life (years) 4 5 5 7 Lessor’s implicit rate (known by lessee) 11 % 11 % 11 % 11 % Residual value: Guaranteed by lessee 0 $ 4,000 $ 2,000 0 Unguaranteed 0 0 $ 2,000 $ 4,000 Purchase option: After (years) none 3 4 3 Exercise price n/a $ 7,000 $ 1,000 $ 3,000 Reasonably certain? n/a no no yes

Explanation / Answer

Situation 1 2 3 4 A. The Lessor's 1. Lease Payments 40000 44000 44000 40000 2. Gross Investment in the lease 40000 44000 44000 44000 3.Net Investment in the lease 34437 37072 41024 41024 The lessee's 4.Lease payments 40000 44000 40000 40000 5. Right of use assets 34437 37072 34437 34437 6. Lease Payable 34437 37072 34437 34437 Situation 4 Lease payment   = Lease terms * Annual Lease Payment Lease apyment = 10000*4 = $40000 Gross Investment in the lease Lease payment + Unguaranteed residual value Gross Investment in the lease = 40000+4000 = $44000 Net Investment in the lease Present velue of gross Investment (10000* 3.4437) +(10000*0.6587) Net Investment = 34437 + 6587     = 41024 Situation 3 Net Investment in the lease Present velue of gross Investment (10000* 3.4437) +(10000*0.6587) Net Investment = 34437 + 6587     = 41024 For Lessee Situation 2 Right of use assets Present value of minimum lease payments (10000*3.4437) + (4000*0.6587) 37072 Situation 4 Right of use assets Present value of minimum lease payments (10000*3.4437) 34437

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