Callaho Inc. leased a building to Bentley Inc. on January 1, 2017. Following is the relevant information:

• The leased building was purchased by Callaho Inc. on January 1, 2017 for cash.
• The leased building cost Callaho Inc. $3 million.
• Callaho Inc. paid insurance and property tax expense on December 31, 2017. The costs were $10,000 and $85,000 respectively.
• The building is depreciated on a straight-line basis and is expected to last for 50 years.
• The lease period is 5 years and consists of a $250,000 payment per year, payable on December 31 of each year.
• The present value of the lease payments is less than 90% of the building's FMV.
• Ownership of the building will be kept by the lessor by the end of the lease term.

Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places

a) What type of lease is this?

b) Record journal entries for Callaho Inc. for fiscal year ending December 31, 2017.

c) Record the journal entry for Bentley Inc. on December 31, 2017