On December $31,2024,$ Kingbird Corporation signed a $5-$year, non$-$cancelable lease for a machine. The terms of the lease called for Kingbird to make annual payments of $$8,508$ at the beginning of each year, starting December $31,2024.$ The machine has an estimated useful life of $6$ years and a $$4,700$ unguaranteed residual value. The machine reverts back to the lessor at the end of the lease term. Kingbird uses the straight$-$line method of depreciation for all of its plant assets. Kingbird's incremental borrowing rate is $5\%,$ and the lessor's implicit rate is unknown.

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What type of lease is this?

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