Auto Loan Payment Example

A car is financed using a three-year loan. The loan has a 8% nominal annual interest rate, compounded monthly. The price of the car is 7,000, and a deposit of 2,000 is paid in cash. Calculate the monthly auto loan payments, assuming that the payments start one month after the purchase.

Last modified July 16th, 2019 by Michael Brown
Read more

How to Calculate a Lease Payment

A lease is a method of financing the use of an asset, and is an agreement between a lessee (who rents the asset), and a lessor (who owns the asset). The lessor is usually a lease company or finance company.

The lessee rents the asset from the lessor in return for a periodic rental payment. The lessee never owns the asset, and at the end of the term it is returned to the lessor or a secondary period of rental is entered into.

Last modified July 16th, 2019 by Michael Brown
Read more

Accounting for Capital Leases Calculator

This accounting for capital leases calculator will help a business to produce the monthly accounting journals required to record capital leases.

The rental payments on a capital lease are split between principal and interest when posted to the accounting records. As the lease liability reduces each month the interest will reduce and the principal / interest split changes.

Last modified July 16th, 2019 by Michael Brown
Read more

Finance Lease Accounting Journal Entries

The finance lease accounting journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of finance or capital leases.

Last modified July 16th, 2019 by Michael Brown
Read more

Operating Lease Accounting

Operating lease accounting deals with the treatment of an asset rented by your business under the terms of an operating lease agreement.

An operating lease is an agreement between your business (lessee) to rent an asset from a lessor. The lessor (lease company, finance company etc.) owns the asset, and your business rents the asset in return for a periodic rental payment. Your business never owns the asset, at the end of the term it is returned to the lessor.

Last modified July 16th, 2019 by Michael Brown
Read more

Capital Lease Accounting

Capital lease accounting deals with the treatment of an asset rented by a business under the terms of a capital lease agreement.

A capital lease or finance lease is an agreement between the business (lessee) to rent an asset from a lessor. The lessor (lease company, finance company etc.) owns the asset, and the business rents the asset in return for a periodic rental payment. The business never owns the asset, at the end of the term it is returned to the lessor or a secondary period of rental is entered into.

Last modified July 16th, 2019 by Michael Brown
Read more

You May Also Like