The BOC Group 2004 Accounting Policies state:

Where finance leases have been entered into, the capital element of the obligations to the lessor are shown as part of borrowings and the rights in the corresponding assets are treated in the same way as owned fixed assets [UK name for non-current assets].

(a) Explain the terms ‘obligations to the lessor’ and ‘rights in corresponding assets’.

(b) Explain how these amounts would be quantified in the balance sheet.

(c) Describe the entries that would appear in the income statement.