Morgan Corp. signs a lease to rent equipment for ten years. The lease payments of $10,000 per

Fantastic news! We've Found the answer you've been seeking!

Question:

Morgan Corp. signs a lease to rent equipment for ten years.
The lease payments of $10,000 per year are due on January 2
each year. At the end of the lease term, Morgan may purchase
the equipment for $50. The equipment is estimated to have a
useful life of 12 years. Morgan prepares its financial statements in
accordance with IFRS. Morgan should classify this lease as a(n)

Operating lease.
Capital lease.
Finance lease.
Sales-type lease.