Question 10 (3 points) Liesel Inc. is considering the following two separate leases. Each lease pertains to the lease of equipment with a fair value of $100,000. Lease Two Lease One Ownership of equipment transfers to lessee at lease-end No No Lease includes a purchase option No Yes Length of lease term 5 Economic life of the equipment 8 8 Alternative use of the equipment at lease-end Yes Yes Annual lease payment, first payment due at end of each period. $21,500 $18,000 Guaranteed residual value $20,000 $0 Liesel Inc.'s incremental borrowing rate is 7% and is not aware of the implicit rate of iace firmade the last bached cecidivanafan MacBook Pro $ 4 & 7 . 3 5 6 8 9 0 E R T Y U O D G J K Guaranteed residual value $20,000 $0 Liesel Inc.'s incremental borrowing rate is 7% and is not aware of the implicit rate of either lease. For Lease One, the lessee estimates an expected residual value of only $12,000 of the equipment at lease-end based on its expected usage. How would Liesel Inc. classify Lease One and Lease Two? Lease One Lease Two Operating lease Operating lease Finance lease Finance lease Operating lease Finance lease Finance lease Operating lease Previous Page Next Page Page 10 of 25 MacBook Pro 4 # $ 4. % 5 & 7 3 6 00 9 0 E R T Y U 0