Use the following information for questions 5 through 8.

Bohl Co. leased a car service station from a major oil company on January 2, 2007. Fair value of the service facility at the time was $400,000. The lease is a 10-year, noncancelable lease. Bohl uses straight-line depreciation for its other various business holdings. The economic life of the facility is 15 years with zero salvage value. Title to the facility will pass to Bohl at termination of the lease. A partial amortization schedule for this lease on Bohls book is as follows:

	Payments	Interest	Reduction in Liability	Lease Liability
Jan. 2, 2007				$400,000.00
Dec. 31, 2007	$65,098.13	$40,000.00	$25,098.13	374,901.87
Dec. 31, 2008	65,098.13	37,490.19	27,607.94	347,293.93

5. From the viewpoint of the lessee, what type of lease is involved above?

Group of answer choices

a. Operating lease

b. None of the above

c. Sales-type lease

d. Finance lease