Complex Lease Accounting: A company leases a specialized manufacturing facility for a term of $15$ years, with an option to purchase the facility for $$100,000$ at the end $($fair value is expected to be significantly higher$).$ The lease payments are $$50,000$ annually, with an additional variable payment based on a percentage of sales above a set threshold.

Determine the lease classification $($operating or finance$)$ and explain the rationale.

Calculate the initial right$-$of$-$use asset and lease liability, making necessary assumptions.

Prepare the journal entries for the first two years, including potential calculations for variable lease payments.

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