Marnie Company enters into a two-year lease. The terms of the lease do not transfer ownership and do not contain a bargain purchase option. The lease is for 60% of the asset's economic life and represents 80% of its fair value. The asset is not a specialized asset and does have alternative uses. How should Marnie classify and record the lease?

a. The lease should be classified as an operating lease, and a lease liability should be recorded at the commencement date of the lease.

b. The lease should be classified as a finance lease, and a lease liability should be recorded at the inception of the lease.

c. The lease is classified as an operating lease, and no lease liability is recorded at the inception because it does not meet finance lease criteria.

d. The lease should be classified as a short-term lease because it is for only two years.