3 of 7 View Policies Current Attempt in Progress -/2 = 1 Crane Co. processes jam and sells it to the public. Crane leases equipment used in its production processes from Larkspur, Inc. This year, Crane leases a new piece of equipment from Larkspur. The lease term is 5 years and requires equal rental payments of $17,000 at the beginning of each year. In addition, there is a renewal option to allow Crane to keep the equipment one extra year for a payment at the end of the fifth year of $13,000 (which Crane is reasonably certain it will exercise). The equipment has a fair value at the commencement of the lease of $87,467 and an estimated useful life of 7 years. Larkspur set the annual rental to earn a rate of return of 5%, and this fact is known to Crane. The lease does not transfer title, does not contain a bargain purchase option, and the equipment is not of a specialized nature. Click here to view factor tables. How should Crane classify this lease? Crane should classify the lease as a/an lease. eTextbook and Media Save for Later Attempts: 0 of 1 used Submit