Reporting Finance Lease, Guaranteed ResidualLessee

Mac Leasing Company (lessor) and Ash Corporation (lessee) signed a four-year lease on January 1, 2020. The underlying asset has an estimated life of six years and a fair value of $220,000, and the property reverts to Mac at the end of the lease term. Lease payments of $52,461 are payable on January 1 of each year and were set to yield Mac a return of 8%, which was known to Ash. The estimated residual value at the end of the lease term is $44,000 and is guaranteed by Ash Corporation. Ash expects the estimated residual value at the end of the lease term to be $44,000. The lease contains no purchase option.

a. How would Ash Corporation classify the lease Amortization Schedule Journal En Finance Lease Operating Lease Sales-Type Lease al = Guaranteed Residual Journal Entries: Estimated Residual