(i) On 1 April 2019 GHL purchased an equipment and simultaneously leased it to SG Health Services Ltd (SHS), an unrelated company in Singapore, on the following terms:

Lease term (with no cancellation clause)	5 years
Remaining useful life of equipment	7 years
Carrying amount and fair value of equipment at 1 April 2019	$918,124
Annual instalment receivable in arrears	$225,000
Interest rate implicit in lease (per annum)	10%
Residual value guaranteed by SHS at 31 March 2024	$91,500
Expected residual value at 31 March 2024	$105,000

GHL has treated the contract as an operating lease and recognized lease rental income of $225,000. Depreciation of $131,161 has been charged to the statement of profit or loss.

1) identify the classification of the lease with the reason for the lease entered by GHL in accordance with HKFRS 16?