Which of the following statements is CORRECT?

a. Accounting Standards Codification Topic 842 (ASC 842) requires that all leases must be reflected on the balance sheet, even operating leases with payment terms of 12 months or less.

b. When a lease is capitalized the lease is reported on the firms balance sheet. A right-to-use asset and a liability are recorded on the balance sheet equal to the present value of the lease payments.

c. Capitalizing a lease means that the firm issues equity capital in proportion to its current capital structure, in an amount sufficient to support the lease payment obligation.

d. The lessee is the owner of the leased property, while the lessor is the party that uses the leased property.

e. If firms were to keep their leases off the balance sheet, their debt ratios would be higher than if the effects of the leases were reflected in their financial statements.