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Each of the three independent situations below describes a finance lease in which annual lease...

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Accounting

Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor's implicit rate of return. (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.)

Situation
1 2 3
Lease term (years) 11 21 4
Lessor's rate of return (known by lessee) 10% 8% 11%
Lessee's incremental borrowing rate 11% 9% 10%
Fair value of lease asset $800,000 $1,180,000 $385,000

Required: a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar.)

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