LO $20\mathrm{.}4$ LO $20\mathrm{.}5$ LO $20\mathrm{.}6$ Efland Company leases equipment to Orange Company. Efland incurred the following costs associated with the lease:

Advertising to find a lessee$$$$20,000$

Commissions for the salesperson$$$$25,000$

Negotiating fees to sign the contract$$$$10,000$

Payment to an existing lessee to terminate its lease early$$$$30,000$

General overhead associated with the leased asset$$$$10,000$

Required:

Explain what initial direct costs are.

Indicate precisely how Efland should account for initial direct costs if this lease is $($a$)$ an operating lease, $($b$)$ a sales$-$type lease, and $($c$)$ a direct$-$financing lease.

Which of the above amounts should Efland consider initial direct costs?