Glade Co. leases computer equipment to a customer under a direct-financing lease. Which of the following must be true about the lease contract?

a. The lease term is for a major part of the economic life of the asset (i.e., substantially all of the assets useful life).

b. A third party guarantees the residual value of the leased asset.

c. The asset is of specialized nature, which means it has no alternative use to the lessor at the end of the lease term.

d. The lessee is given an option to purchase the asset and the lessee is reasonably certain to exercise this option.