List some advantages of leasing. You need to give explanations why they are the advantages.

What is the difference between a sales$-$type and a direct financing type of finance lease under ASC $842?$

How do lessors determine whether to record a lease as: $1.$ Sales$-$type, $2.$ Direct financing or $3.$ Operating, under the provisions of ASU $2016-02?$

Burdi Leasing Company agrees to lease equipment to Hanson Corporation on January $1,2020.($Its fiscal year ends on December $31$st each year$)$ The following information relates to the lease agreement.

A$.$ The term of the lease is $7$ years with no renewal option, and the machinery has an estimated economic life of $9$ years.

B$.$ The cost of the machinery is $$525,000,$ and the fair value of the asset on January $1,2020,$ is $$700,000.$

C$.$ At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $$50,000.$ Hanson estimates that the expected residual value at the end of the lease term will be $$50,000.$ Hanson amortizes all of its leased equipment on a straight$-$line basis.

D$.$ The lease agreement requires equal annual rental payments, beginning on January $1,2020.$

E$.$ The collectibility of the lease payments is probable.

F$.$ Burdi requires a $5\%$ rate of return on its investments. Hanson's incremental borrowing rate is $6\%,$ and the lessor's implicit rate is unknown.

How should Burdi and Hanson record this lease?

Discuss the difference between a finance lease and an operating lease from a lessee's perspective.