Each of the four independent situations below describes a direct financing lease in which annual lease payments

Question:

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. Each is a capital lease for the lessee. Determine the following amounts at the inception of the lease:

A. The lessor’s:
1. Minimum lease paymesnts
2. Gross investment in the lease
3. Net investment in the lease

B. The lessee’s:
4. Minimum lease payments
5. Leased asset
6. Lease liability