Lease A does not contain a bargain purchase option, but the lease term is equal to 90% of the estimated economic life of the leased property. Lease B does not transfer ownership of the property to the lessee by the end of the lease term, but the lease term is equal to 75% of the estimated economic life of the leased property. How should the lessee classify these leases?

Lease A

Lease B

(a)Operating lease

Capital lease

(b)Operating lease

Operating lease

(c)Capital lease

Operating lease

(d)Capital lease

Capital lease