Callaway Golf Co. leases telecommunications equipment from Crane Company. Assume the following data for equipment leased from Crane Company. The lease term is 5 years and requires equal rental payments of $25,420 at the beginning of each year. The equipment has a fair value at the commencement of the lease of $123,000, an estimated useful life of 8 years, and a guaranteed residual value at the end of the lease of $12,710. Crane set the annual rental to earn a rate of return of 5%, and this fact is known to Callaway. The lease does not transfer title or contain a bargain purchase option, and is not a specialized asset. How should Callaway classify this lease? eTextbook and Media Attempts: 0 of 1 used