An auditor determines that $(1)$ a client has properly capitalized a leased asset $($and lease liability$)$ as representing, in substance, an installment purchase; $(2)$ no initial direct costs were incurred; and $(3)$ the lessee receives ownership at the end of the lease term. As part of the auditor$$s procedures, $($s$)$he should

Evaluate whether the total amount of lease payments represents the fair value of the property.

Determine that the leased property is being amortized over the term of the lease.

Substantiate the cost of the property to the lessor and determine that this is the cost recorded by the client.

Evaluate the propriety of the interest rate used in discounting the future lease payments.