What are lease installments?

A given scheduled payment made by a lessee to a lessor of an amount of a leased asset’s acquisition cost (principal), interest and any insurance premium and other costs according to the repayment schedule is a lease installment.  The amortization schedule is the table in a lease agreement that sets forth the leased asset's purchase value, the lease value, the monthly installments, repayment dates, lease fees, any payable insurance, the balance residual value and other financial requirements under the lease agreement.  Lease payments, excluding executory costs, reduce the lessor’s lease receivable and unearned interest income while reducing the leased asset’s carrying value and corresponding liability for the lessee.

The outstanding capital cost of a finance lease that is payable in a lump sum by the lessee upon a lease’s early termination is a terminal payment, it equaling the sum of the remaining payments discounted at the implicit interest rate and any early termination penalty less the leased asset’s market value at the end of the lease term.  Terminal payment is set at lease inception and varies from lease to lease.  In the event of early termination of a finance lease, the lessee is generally held responsible for the lessor’s losses.