Melnik Shops, Inc., a chain of specialty womens apparel stores, reported the following information about leases in its annual report (in thousands):

	December,31
	2018	2017
Capital lease asset,gross	1,960	1,960
Less: Accumulated depreciation	1,421	1,323
Capital lease asset,net	539	637
Capital lease obligation	842	864

The only asset under a capital lease is a warehouse and office building. The building has an economic life of twenty years and is being depreciated on a straight-line basis. Lease payments are made on the last day of the year.

b. The interest on the lease obligation was $108 (in thousands) in fiscal 2018. What is the interest rate used for the lease obligation? What was the total lease payment on December 31, 2018? Reconstruct the 2018 journal entry. c. In what year was the building placed into service?