(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

Question: 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.

identify the classification of lease with reason for the lease entered by GHL in accordance with HKFRS 16 and its adjusting entries