Technoid Inc. sells computer systems. Technoid leases computers to Lone Star Company on

January $1,2024.$ The manufacturing cost of the computers was $$12$ million.

This noncancelable lease had the following terms:

Fair value of the computers at January $1,2024$: $$20$ million. fessor wants to recover the

fair vale through lease payment of $$2,466,754$ annually; first payment at January $1.2024$:

remaining payments at December $31$ each year through December. $2032$

Lease term: $10$ years.

No residual value; no purchase option.

Economic life of equipment: $11$ years.

Implicit interest rate and lessee's incremental borrowing rate: $5\%$ semiannually.

Technoid would account for this as:

An operating lease.

A sales$-$type lease with selling profit.

A sales$-$typc lease without selling profit.

A finance lease.