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Restaurant Equipment, Inc., leased nonspecialized equipment, with an original cost of $5 million and a remaining estimated useful life of 10 years, to Rocky Bottom

Restaurant Equipment, Inc., leased nonspecialized equipment, with an original cost of $5 million and a remaining estimated useful life of 10 years, to Rocky Bottom Cafe for a 5-year period, at which time possession of the equipment will revert back to Restaurant Equipment, Inc. The equipment normally sold for $6.1 million. The present value of the lease payments for both the lessor and lessee is $5.3 million. The lessee does not strictly adhere to the suggested FASB criteria guidelines. The first payment was made at the beginning of the lease. How should Rocky Bottom Cafe classify this lease? O Operating lease O Finance lease

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