Each of the 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 interest rate. Lease term Lessor's desired rate of return Lessee's incremental borrowing rate Fair value of asset Situation 1 Lessee 2 Lessor 10 years 20 years 10% 12% 12% 10% $ 600,000 $ 400,000 For convenience, here are some table values: Periods; interest rate PV, ordinary PV, annuity annuity due 10 periods, 10% 6.1446 6.7590 10 periods, 12% 5.6502 6.3283 20 periods, 10% 8.5136 9.3649 20 periods, 12% 7.4694 8.3658 Required: For each situation determine the amount of the annual lease payment, as calculated by the lessor. Note: Round your answers to the nearest whole dollar amounts. Annual lease payment Situation 1 Situation 2

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