look, the formula for sales type and direct financing is easy enough.

1.  both are a capital lease.

2. carrying value NOT EQUAL to fair value then sales type lease.

this makes sense because when you sell goods you recognize the sale and then the related cost of goods sold. SO does Sales type lease.

dr lease receivable 

     cr sales revenue

this entry is at fair value

dr cost of goods sold

     cr asset

this entry is at carrying value

the difference between the two sets of entries is the immediate profit recognition.

the other profit which is interest revenue is recognized over the life of the lease.

for direct financing, the lease term only recognizes interest revenue.

carrying value = fair value.

dr lease receivable

     cr asset

both entries are at carrying value or fair value

you know it is direct financing because c/v = fair value, so it does not matter whether your j/e is c/v or fv because they are the same number.

therefore, the only entry you make over the term of the lease is interest revenue.

thanks a lot !!!