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Interest Expense
The cost incurred by an entity for borrowed funds, calculated as the principal times the interest rate over a period.
Residual Value
The estimated value that an asset will have at the end of its useful life, often used in calculating depreciation.
Capital Lease
A type of long-term lease agreement in which the lessee essentially buys an asset and pays for it over the lease term, with the asset's ownership potentially transferring to the lessee at the lease's end.
Bargain Purchase Option
A provision in a leasing contract permitting the lessee to buy the leased item for a price well below the anticipated market value once the lease period concludes.
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