On January 1,2017 Kara Inc

On January 1,2017 Kara Inc.sold an office building to Dusty Capital for its fair value of $35,000,000 and immediately leased it back under a 3-year non-cancellable lease at $2,000,000 per year,payable at the beginning of each year.Dusty used an implicit rate of 8% to determine the lease payments,and this rate is known to Kara.The building had a carrying value of $14,000,000 on Kara's books and its remaining useful life is 20 years.Which of the following is correct?

A) Since this is an operating lease and the sale is at fair value the gain on the sale can be recognized immediately.
B) Since this is a finance lease and the sale is at fair value the gain on the sale can be recognized immediately.
C) Since this is a finance lease the seller-lessee amortizes the gain in proportion to the depreciation of the asset.
D) Since this is an operating lease the seller-lessee amortizes the gain in proportion to the lease payments.