Hi, client has a 15 month lease of a property that he rents out on airbnb. At the end of the lease, he will purchase the property. Contract has been signed and money escrowed. I believe because of this, this would be a capital lease, therefore depreciated.

My questions are:

How do I calculate interest expense? Lease payments - depreciation expense?

Would the cost to depreciate be different than the usual purchase price/land value?

Thank you!