A Lessee Is Attempting to Circumvent the Accounting Rules, Which

A lessee is attempting to circumvent the accounting rules, which require lease capitalization.Which of the following is most likely to lead to classification of a lease as an operating lease for the lessee?

A) increase the term of the lease.decrease annual executory costs
B) attempt to reduce the lessee's borrowing rate
C) contract provides for a third-party guarantee of residual value
D) contract provides that lessee pays executory costs

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