Minnetonka Company leases an asset. Information regarding the lease:

• Fair value of the asset: $400,000.
• Useful life of the asset: 6 years with no salvage value.
• Lease term is 5 years.
• Annual lease payments are $60,000
• Implicit interest rate: 11%.
• Minnetonka can purchase the asset at the end of the lease period for $50,000.

What type of lease is this?

Multiple Choice

• Short term.

• Long term.

• Operating.