Miller Company Leases Office Equipment from Swanson Company

Miller Company leases office equipment from Swanson Company.The fair value of the equipment exceeds Swanson's cost.Collectability of the lease payments is reasonably assured; there are no material uncertainties surrounding the lease.Additionally,there is a bargain purchase option.Swanson will account for the lease as a(n) ________.

A) guaranteed lease
B) direct financing lease
C) operating lease
D) sales-type lease

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