An agreement between two parties whereby one party allows the other to use his/her
property for a certain period of time in exchange for a periodic
fee. The property covered in a lease is usually
real estate or equipment such as an automobile or machinery. There are two main kinds of leases. A
capital lease is long-term and
ownership of the asset transfers to the
lessee at the end of the lease. An
operating lease, on the other hand, is short-term and the
lessor retains all rights of ownership at all times.