In your audit of Canyon Outdoor Provision Companys financial statements, the following transactions came to your attention:

1. Canyon Outdoors operating lease for its main store is with York Properties, which is a real estate investment firm owned by Travis Smedes. Mr. Smedes is a member of Canyon Outdoors board of directors.

2. One of Canyon Outdoors main supplies for kayaks is Hessle Boating Company. Canyon Outdoor has purchased kayaks and canoes from Hessel for the last 25 years under a long-term contract arrangement.

3. Short-term financing lines of credit are provided by Cameron Bank and Trust. Suzanne Strayhorn is the lending officer assigned to the Canyon Outdoor account. Suzanne is the wife of the largest investor of Canyon Outdoor.

4. Hillsborough Travel partners with Canyon Outdoor to provide hiding and rafting adventure vacations. The owner of Hillsborough Travel lives in the same neighborhood as the CEO of Canyon Outdoor. They are acquaintances, but not close friends.

5. The board of directors consists of serval individuals who own stock in Canyon Outdoor. At a recent board meeting, the board approved its annual dividend payable to shareholders effective June 1.

Instructions

1. Read the background information above

2. Which of the transactions listed in the Background Information would most likely be considered a related party transaction?

3. Provide in-depth reasoning regarding your decision.