Which of the following statements regarding lease accounting is/are correct?
I. A capital (finance) lease is a form of off-balance sheet financing that transfers substantially all of the benefits and risks of ownership of property to the lessee.
II. It is possible for a lessee to account for a lease as an operating lease while the lessor accounts for the lease as a capital (finance) lease.
III. When calculating the present value of the minimum lease payments, the lesser of the implicit rate (if known) and the lessee’s incremental borrowing rate should be used.
a. II only
b. III only
c. II and III
d. I, II, and III