Which of the following statements is correct?

a$.$ The discount rate used to determine the present value of the lease payments recorded on the balance sheet is the firm$$s weighted average cost of capital $($WACC$)$ because the risk of a lease is similar to that of the firm$$s average capital budgeting project.

b$.$ Accounting Standards Codification Topic $842($ASC $842)$ eliminates off$-$balance$-$sheet leases, so all operating and finance leases must be reported on the balance sheet. Thus, a lessee firm will report a $$right$-$to$-$use$$ asset and a liability on its balance sheet equal to the present value of the lease payments.

c$.$ A lessee with a finance lease will report both interest and amortization expenses on the income statement. The amortization expense would be considered an operating expense $($similar to the treatment of depreciation$),$ while the interest expense is a financing expense and shown below operating income on the income statement. As a result of this treatment, lessees with finance leases will report higher earnings before interest, taxes, and depreciation and amortization $($EBITDAs$)$ than lessees with operating leases.

d$.$ The economic effects of buying or leasing an asset are not similar, and as a result the accounting treatment of the two $($as shown on a firm$$s financial statements$)$ are quite different.

e$.$ Under Accounting Standards Codification Topic $842($ASC $842)$ there are three different lease classifications: finance leases, operating leases, and residual leases.