On January 1, 2023, Quong Corporation (the lessee) entered into a four-year, non-cancellable equipment lease contract with Zareiga Inc. (the lessor). The PV of the minimum lease payments required was $116,025. Also at lease inception, it was estimated that the equipment’s economic life was eight years and that its fair value was $150,000. The lease does not transfer title or contain a bargain purchase option and it is not for specialized equipment.

(a) Assume that Quong follows IFRS. How should Quong set up this lease?

(b) Assume that Quong follows ASPE. How should Quong classify this lease?