Response to the following questions:
1. Valdez Company borrows $170,000 cash from a bank and in return signs an installment note for five annual payments of equal amount, with the first payment due one year after the note is signed. Use Table B.3 in Appendix B to compute the amount of the annual payment for each of the following annual market rates: (a) 4%, (b) 8%, and (c) 12%.
2. When can a lease create both an asset and a liability for the lessee?
3. Compare and contrast an operating lease with a capital lease.
4. Describe the two basic types of pension plans.