RoltRolt

Digital Solutions signed a

$33-$year

lease at the beginning of the current year. The leased equipment has an economic life of

$55$

years and a fair value of

$ $1$ comma $500$$$1,500.$

Under the terms of the$$lease$,$

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is required to pay

$ $530$$$530$

on January $1$ of each year. There is no purchase$$option$,$ and

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must return the equipment at the end of the lease term.

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does not know the$$lessor$\text{'}$s implicit rate but recently borrowed at

$7\%7\%$

under a

$33-$year

loan agreement. Should

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account for this lease as an operating or a finance$$lease$?$