I need the issue and the rule

We noticed that you rent your building and have allocated the rent to the office and shop spaces. What did you base your allocation on? We also need to determine whether that contract is an operating or finance lease. Will you own the building when the lease is over? What is the useful life and fair market value of the building? How long is the lease? We will also need this same information for the trucks you are renting. I think we told you that on 1/1/20X1 we rented a warehouse that Kay's cousin owns and is planning to tear down. Since we could not find any other affordable space, she decided to delay the demolition and we moved right in. As you can see from the mess around here, we are currently packing things up to move to a new location, so we obviously are not going to own the building, nor would we want to. We signed a new 10 year lease on a nice building in the Gateway Industrial Park as of January 1 this year and have gone as far as setting up the shop over there, but we are waiting to move the office until after we close the books. It has become a lot more work than I anticipated due to this review requirement. To answer your questions, for 201 our rent was $29,400 per year and was allocated $24,500 to the shop and $4,900 to the office, based on square footage used for each. Starting in 202 our rent in the new location will be $38,000 per year. We will allocate it to the shop and office in the same proportions. One piece of good news is, thanks to Rick's negotiating skills we did not have to pay a deposit on the new lease, and the other good news is that Kay's cousin is not charging us any rent for this last month (January 202 ) we are using this building. You can see by looking around that this place is long past its useful life. No papent Jen Our crew trucks are rented at $150 /day as needed, with no fixed term. As you know, we are in the process of negotiating the purchase two new trucks so that we will no longer need the rental trucks