The lessor leased equipment to the lessee. The fair value of the equipment is $246,000. Lease payments are $35,000 per year, payable at the end of the year, for 10 years. The interest rate implicit in the lease is 9%. At the end of 10 years, the lessor will repossess the equipment. The lease does not include a bargain purchase option, and the equipment has a total estimated useful life of 15 years. Is the lease an operating lease or a capital lease? Explain.