A lease is an agreement that allows one party to use another party's property, plant, or equipment. Leases have become an important source for financing fixed assets for businesses and consumers In a lease agreement, the uses the leased assets, which are owned by the Lease agreements can take several forms depending on the needs of the lessee and lessor. Classify the types of leases desaribed in the following table Financial Lease Operating Lease Sale and Leaseba A key characteristic in this type of lease agreement is that the asset is new and the lessor buys it from amanufacturer or The lessor maintains and finances the asset, but the lease payments are not fully amortized. This means that the payment received from the lease agreement does not always cover the asset's full cost. The owner sells the asset and leases it again from the buyer on a long-term basis and continues to use the asset but no longer owns it Leasing Noften referred to as off-balance-sheet fnancing esets od' lot always show up on the balance sheet because the assets and capital needed to acquire fixed According to Financial Accounting Standards toard (FASB) Statement No. 13, which of the following statements is true about leases that must be capitalized? O The present value of all future lease payments should be reported as assets on the balance sheet. O Leased assets should be reported as fixed assets on the balance sheet Different companies or individuals offer different terms for lease contracts An example ofone such lease contract follows. Hewlett-Packard (HP) offers a ense rogram for its sser Printers and POs The inese provides a 35-month contract with $0 down payment ?.279 per month for the aser printer. The teas payments fully amortize the printer's cost, and the lense covers maintenance costs. It also containsa cancelation clause if the lessoe decided to terminate the contract Identify the type of lease cescibed in the preocing example