Blithe Entity, a windmill manufacturer, leases a truck to deliver its products to its customers. The lessor specifies in the standard lease agreement that the truck can be driven for 250,000 miles before extensive and costly repairs are needed to extend its economic life. At the inception of the lease, Blithe Entity expects to drive the truck 55,000 miles per year. The term of the lease is four years. How should this lease be classified?

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The Answer of Blithe Entity, a windmill manufacturer, leases a truck to deliver its products to its customers. The lessor specifies in the standard lease agreement that the truck can be driven for 250,000 miles before extensive and costly repairs are needed to extend its economic life. At the inception of the lease, Blithe Entity expects to drive the truck 55,000 miles per year. The term of the lease is four years. How should this lease be classified?

Blithe Entity, a Windmill Manufacturer, Leases a Truck to Deliver