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 |