$$Situation$1234$Lease term $($years$)4444$Asset$$s useful life $($years$)6566$Asset$$s fair value$$44,000$$$45,000$$$41,000$$$38,000$Purchase option that is reasonably certain to be exercised?NoYesNoNoAnnual lease paymentsBeginning of yearEnd of yearBeginning of yearEnd of yearLessor$$s implicit rate $($known by lessee$)5\%6\%5\%6\%$Lessee$$s incremental borrowing rate$5\%5\%5\%5\%$

Required:

Each of the four independent situations above describes a lease requiring annual lease payments of $$10,000.$ For each situation, determine the appropriate lease classification by the lessee.

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$