BE21-1 (L02) Callaway Golf o. leases telecommunications equipment from Photon Company. Assume the following data for equipment leased from Photon Company. The lease term is 5 years and requires equal ren 8 years, an How should Callaway classify this lease? al payments of $31,000 at the he equipment has a fair value at the commencement of the lease of $150,000, an estimated useful life of se of $15,500. Photon set the annual rental to earn a rate of return of 6%, is known to Callaway. The lease does not transfer title or contain a bargain purchase option, and is not a specialized asset. d a guaranteed residual value at the end of the lea