Leasing Of Three New Trucks

Type of Leases
Name
Institution
To:
From:
Date: July 3, 2014
Subject: Leasing Of Three New Trucks
Following your interest in leasing three new trucks from our company to add to your fleet, we would like to describe to you the types of leases we offer as well as their reporting requirements of each of the leases. There are two types of leases and they exist for tax purpose, although each lease may have different benefits and rules. They include;
Operating Lease: This type of lease provides the lessee or business, the right to use the truck for the lease term designated. However, we assume that no benefits or risks related to ownership beyond the truck use. When the lease term expires, you will be required to return the truck to us, although there is a purchase option at or close to the fair market value. We deduct operating lease payment as an expense (McGregor, 2006).
Capital Lease: Similarly to the operating lease, capital leases will provide you with the right to use the truck we will lease to you. You will also get some of the benefits and risks o...