Chad Ltd negotiated a lease on the following terms: the term of the lease was 5 years; the estimated useful life of theleased equipment was 10 years; the purchase price was R60 000; and the annual lease payment was R5 000. This leaseshould be classified as_____. Select one: a. a financial lease b. An operating lease c. neither operating nor finance lease d. A finance lease

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A: Situation 1Situation 2Situation 3   19,403.00    113,487.00    87,735.00 Please see the working…

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.