Answer:
- Lease M → Finance Lease
- Lease P → Finance Lease
Step-by-step explanation:
An operating lease is one where the leasee simply pays rental for the asset. A finance lease on the other hand, has ownership attributes even though ownership is not transferred.
According to U.S. GAAP provisions, a lease is a finance lease if the lease term in more than 75% of the estimated economic life of the leased asset and seeing as this is the case for both Lease M and P, they are both finance leases.