Culinary Creations leased kitchen equipment under a five-year lease with an option to renew for three years atthe end of five years and an option to renew for an additional three years at the end of eight years. The first threeyear renewal option can be exercised for one-half the original and usual rate. What is the length of the lease termthat Culinary Creations should assume in recording the transactions related to the lease?

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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.