A lessor classifies a lease as a Direct Financing Lease. Proper recordings at the lease's inception will have what effect?

Select one:

a.Profit recorded will be the difference between the asset cost and its FMV.

b.Total net assets will not change

c.Liabilities will increase by the difference between the asset cost and the FMV.

d.A gain on sale will be recorded if the lessor does not regard the asset as inventory.

e.The difference between the asset cost and its FMV will be debited to Deferred Gross Profit.