Fanco leased equipment from Lesser Leasing on December 31, 2026. The lease is a 10-year lease with annual payments of $155,348 due on December 31 of each year beginning at lease inception. Fanco knows of Lessor's required 10% rate of return. The market value of the 30-year asset being leased is $3,000,000. Title does not pass to Fanco and there is no purchase option.

Group of answer choices

At lease inception, Lessor will credit Leased Assets.

At lease inception, Fanco will credit ROU Asset.

Lesser will depreciate the asset over 10 years.

Lessor will depreciate the asset over 30 years.