In $2019,$ Martinez Hardware leased

computers to Battaglia Corporation. The

lease was for two years with the option to

renew as many times as desired at the

same rate plus $2$ percent. Battaglia is

allowed to ask for computer and system

upgrades once per lease term. In addition

to the leasing costs, Martinez also incurs

setup costs every time they install a new

computer for Battaglia. Which unique

accounting problem for leases is most

likely to apply to this situation?

current versus noncurrent classification

$-$initia direct costs

$-$bargain$-$purchase options

$-$residual values