The Lessor Would Most Likely Prefer a ________ or ________

The lessor would most likely prefer a ________ or ________ lease to an operating lease. Nonoperating lease treatment would permit a financial service company lessor to remove heavy machinery and equipment, jet airlines, oceangoing vessels, and such from its balance sheet and replace it with the ________, a financial asset compatible with the nature of its business. In addition, the nonoperating lease results in the recognition of ________, rather than ________ revenue.

A) standalone price; sales-type; fair value of the leased asset; financing income; unearned
B) standalone; operating; fair value of the leased asset; interest income; rent
C) direct financing; sales-type; net investment in the lease; interest income; rent
D) direct financing; operating; net investment in the lease; financing income; unearned

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