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Please answer Q 15-4 and Q-15-5. Thank you! Q 15-4 Q...

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Accounting

image Please answer Q 15-4 and Q-15-5. Thank you!
Q 15-4 Q 15-5 A lessee should classify a lease transaction as a finance lease if it is noncancelable and one or more of five classification criteria are met. Otherwise, it is an operating lease. What are these criteria? Lukawitz Industries leased non-specialized equipment to Seminole Corporation for a four-year period, at which time possession of the leased asset will revert back to Lukawitz. The equipment cost Lukawitz $4 million and has an expected useful life of six years. Its normal sales price is $5.6 million. The present value of the lease payments for both the lessor and lessee is $5.2 million. The first payment was made at the beginning of the lease. How should this lease be classified (a) by Lukawitz Industries (the lessor) and (b) by Seminole Corporation (the lessee)? Why

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