On January 1, Year 1, Lessee entered into a 4year lease and did not incur initial direct costs. At the lease commencement date, Lessee

A. Must discount the lease payments using the lessors incremental borrowing rate.

B. Recognizes the same amount for the rightofuse asset and the lease liability under a finance lease and an operating lease.

C. Applies different accounting for initial measurement of a rightofuse asset under finance and operating leases.

D. Measures the lease liability at the sum of the present values of the rental payments and the expected residual value of the leased asset.