(1) On May 5th, 2020, Fox Co. sold equipment for $350,000 when book value was $410,000. This equipment was purchased several years ago for $790,000. What are the financial statement effects of Fox's entry for the sale?

A- A: DL: NESE: DNI: DCFs: I

B- A: DL: NESE: DNI: ICFs: I

C- A: IL: NESE: DNI: DCFs: I

D- A: DL: NESE: DNI: DCFs: NE

(2) If Owl Co. leases cars from Fox Co. and none of Group I criteria is met but 2 of Group II criteria is met, what is the lease classification for Owl and Fox, respectively?

A. Operating & Operating

B. Finance & Sale-Type

C. Operating & Direct Financing

D. Finance & Operating

E. Operating & Sales-Type