Presented below are three different lease transactions in which Amsrud Enterprises engaged in 2017. Assume that all lease transactions start on January 1, 2017. In no case does Amsrud receive title to the properties leased during or at the end of the lease term.

Instructions
(a) Identify the leases above as operating or finance leases. Explain.
(b) How should the lease transaction with Haber Co. be recorded on January 1, 2017?
(c) How should the lease transactions for Lennon Ltd. be recorded in 2017?

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Lessor Schell Ltd. Haber Co Lennon Ltd Type of property Bargain purchase option Lease term Estimated economic life Yearly rental Fair value of leased asset Present value of the lease rental payments Bulldozer None 4 years 8 years 13,000 80,000 48,000 Truck None 6 years 7 years 15,000 72,000 62,000 Furniture None 3 years 5 years 4,800 27,500 12,000