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Oriole Company leases a building to Sage Hill, Inc. on January 1,2025. The following facts pertain to the lease agreement. 1. The lease term is 5 years, with equal annual rental payments of $7,120 at the beginning of each year. 2. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 3. The building has a fair value of $35,000, a book value to Oriole of $28,000, and a useful life of 6 years. 4. At the end of the lease term, Oriole and Sage Hill expect there to be an unguaranteed residual value of $6,315. 5. Oriole wants to earna return of 8% on the lease, and collectibiity of the payments is probable. Sage Hill was unaware of the implicit rate used in the lease by Oriole and has an incremental borrowing rate of 9%. Click here to view factor tables. How would Oriole (lessor) and Sage Hill (lessee) classify this lease? Oriole would classify the lease as a lease. Sage Hill would classify the lease as a lease. How would Oriole initially measure the lease receivable, and how would Sage Hill initially measure the lease Hability and right-of-use asset? (For colculation purposes, use 5 decimal ploces as displayed in the foctor toble provided and round final answers to 0 decimal places, es 5,275.)