Using IRAC guidelines, identify issues with in accordance with FASB codification for the following and MACRs depreciation table. We noticed that you made a large lease payment for a truck on February $1$ this year. Is there a new long$-$term lease on a truck? If so$,$ we will need a copy of the lease since we need to determine if this is another operating lease or if it is instead a finance lease. To determine that, we need to know the lease term, the interest rate on the lease, whether ownership will transfer at the end of the lease, and the useful life and fair value of the truck on the date of the lease.

On Feb $1,20$X$3,$ we leased the third truck that is tooled to our specifications. Rick determined that due to the special tooling, we are better off in a lease situation this time, versus purchasing it and having to worry about selling it later. The estimated useful life of the truck is $6$ years, the lease term is $5$ years, and the interest rate is $4\mathrm{.}5\%.$ Rick and the dealer agreed on the price of $$132,000.$ The truck will be returned to the dealer at the end of the lease with the understanding that we do not have to guarantee a residual value. Annual payment for year $1$ in an amount of $$28774\mathrm{.}00$ was made on $01$ Feb the same year.