On January 1, year 1, Asher Enterprises, a calendar-year company that prepares annual financial statements, leased a piece of equipment from Simba Company. Simba Company is a calendar-year company that prepares annual financial statements. The noncancellable lease has a 10-year term and requires lease payments of $99,000 a year, at the beginning of each year. The first lease payment was due on January 1, year 1. The rest of the lease payments are due on December 31 of each year. Thus, the second lease payment will be due on December 31, year 1. The lease agreement does not transfer ownership of the equipment, and it does not contain a purchase option. The lease agreement also does not allow for a renewal option of any sort. The equipment is not customized for use by Asher. Collectability is reasonably assured. The equipment has an expected life of 6 years and a current fair value of $268,000. The equipment has a carrying value of $268,000 on Simba Company's balance sheet. Simba incurred direct cost of $3,000. Asher's incremental borrowing rate is 8% and Asher can compute the implicit rate. Both companies utilize the straight-line method of depreciation, with no residual values. Asher should account for this lease as a: a. Finance lease b. Sales-type lease c. Direct-financing lease d. Operating lease e. None of the above