Carla Vista Company leases a building to Tamarisk, Inc. on January 1, 2020. The following facts pertain to the lease agreement.

1.		The lease term is 6 years, with equal annual rental payments of $3,694 at the beginning of each year.
2.		Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature.
3.		The building has a fair value of $20,000, a book value to Carla Vista of $13,000, and a useful life of 7 years.
4.		At the end of the lease term, Carla Vista and Tamarisk expect there to be an unguaranteed residual value of $3,250.
5.		Carla Vista wants to earn a return of 9% on the lease, and collectibility of the payments is probable. Tamarisk was unaware of the implicit rate used in the lease by Carla Vista and has an incremental borrowing rate of 10%.

Click here to view factor tables. How would Carla Vista (lessor) and Tamarisk (lessee) classify this lease?

Carla Vista would classify the lease as a

lease.

Tamarisk would classify the lease as a

lease.

How would Carla Vista initially measure the lease receivable, and how would Tamarisk initially measure the lease liability and right-of-use asset? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to 0 decimal places, e.g. 5,275.)

		Carla Vista
Lease receivable		$
Present value of lease pay		$

		Tamarisk
Lease Liability/Right-of-Use Asset		$