Rizzo Iron Works signed a lease on January 1 with Seamus Bank for aniron-stamping machine. The equipment is not specialized in nature. The lease has a 8-year term with no purchase option or transfer of ownership. Under the terms of thecontract, Rizzo must pay $3,400 on January 1 of each year. Seamus Bank's implicit rate is 9%. Theiron-stamping machine has an economic life of 20 years and a fair value of $43,000. If Rizzo borrowed at Seamus Bank, the loan would carry an interest rate of 11%. The lessee knows the implicit rate.

Is this contract an operating or a finance lease for thelessee?