What is the reduction in the lease liability recorded

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Question - Nace Manufacturing Company leased a piece of nonspecialized equipment for use in its operations from Righteous Leasing on January? 1, 2019. The 10 year lease requires lease payments of $ 8,000, beginning on January? 1, 2019, and at each December 31 thereafter through 2027. The equipment is estimated to have a 10 year? life, is depreciated on the straight-line basis and will have no residual value at the end of the lease term.? Nace's incremental borrowing rate is 5?%. Initial direct costs of $ 1, 100 are incurred by the lessee on January? 1, 2019. Righteous Leasing acquired the asset just prior to the lease term at a cost of $ 65, 917. Collection of all lease payments is reasonably assured.

What is the reduction in the lease liability recorded with the first and second lease? payments, respectively?

Reference no: EM132864947

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