Disguised sale vs leased equipment

[newbie]

Have a excavator leasing equipment for 42 months at $2,750 a month.

Cost of equipment is stated as $75,000 and he had to make the last payment with the First payment. Can the total lease payments be written off when paid or do I need to depreciate the $75,000 and figure the interest by working backwards as there is no stated rate.

He is responsible for upkeep and can walk away at anytime or if all 42 payments are made the machine belongs to him after final payment.

[veritas]

Are you

sure he can walk away anytime?

[newbie]

The payments are $2750.00 a month - my bad. Yes he needs to maintain the machine and except for "normal" wear and tear he can walk away.

[BOB W]

The payments are $2750.00 a month - my bad. Yes he needs to maintain the machine and except for "normal" wear and tear he can walk away.

If I had this client I would consider it a Purchance/Finance based on the fact that there is no 10% OR GREATER BUYOUT AT THE END OF THE LEASE.