The commencement of a five-year lease is December 31, 2013. The agreement specifies equal annual lease payments on December 31 of each year. In its 2014 income statement: A) the lessee will report interest expense and amortization expense. B) the lessee will report interest expense and accretion revenue. C) the lessor will report accretion expense and amortization expense. D) the lessor will report accretion expense and interest revenue.
