A lease arrangement that involves a manufacturer or dealer lessor is one in which the dealer or manufacturer sells certain items such as vehicles, machines or office equipment that may be manufactured internally or purchased from another supplier. In addition, the dealer/manufacturer may offer finance arrangements to customers. At the commencement of the lease, the dealer/manufacturer is required to recognize the following accounts: i. Sales revenue at the fair value of the underlying asset ii. Cost of sales expense at the cost or carrying amount of the underlying asset iii. Initial direct costs in connection with obtaining the lease iv. Lease receivable based on lower of fair value and present value v. Reduction in inventory based on cost a. i, ii, iii, v b. i, ii, iii, iv c. i, ii, iii, iv, v d. ii, iii, iv, v