A lessee reported a ten-year capital lease requiring equal annual payments. The reduction of the lease liability in year 2 should equal

Name: A lessee reported a ten-year capital lease requiring equal annual payments. The reduction of the lease liability in year 2 should equal
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Question

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The reduction of the lease liability in year 2 should equal the current liability shown for the lease at the end of year 1, as this represents the portion of the lease liability that is due to be paid off in the following year.

A Lessee Reported a Ten-Year Capital Lease Requiring Equal Annual