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

a) (Lease A) Operating lease (Lease B) Capital lease

b) (Lease A) Operating lease (Lease B) Operating lease

c) (Lease A) Capital lease (Lease B) Capital lease

d) (Lease A) Capital lease (Lease B) Operating lease

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  • Category:- Accounting Basics
  • Reference No.:- M948664

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