Question 6 of 10 View Policies - / 2.5 Current Attempt In Progress Wildhorse Company leases a building to Windsor, Inc. on January 1, 2020. The following facts pertain to the lease agreement. 1. The lease term is 6 years, with equal annual rental payments of $3,933 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 $22,000, a book value to Wildhorse of $15,000, and a useful life of 7 years. III E 4. 5. At the end of the lease term, Wildhorse and Windsor expect there to be an unguaranteed residual value of $3,750. Wildhorse wants to earn a return of 8% on the lease, and collectibility of the payments is probable. Windsor was unaware of the implicit rate used in the lease by Wildhorse and has an incremental borrowing rate of 9%. Click here to view factor tables. How would Wildhorse (lessor) and Windsor (lessee) classify this lease? Wildhorse would classify the lease as a lease. Windsor would classify the lease as a lease.