how should the lessee classify these leases 581434

Lease A does not contain a bargain purchase option, but the lease term is equal to 90 percent 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 percent 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