Please explain best as possible. On December 31 2008 Mendez inc leased machinery with a fair value of 840000 from cey rentals co. The agreement is a six year noncancelable lease

PROBLEM IV On December 31,2 Cey Rentals payments of $160,000 beginning December 31, for by Mendez as a Finance lease. Mendez's incremental borrowing rate is l knows the interest rate implicit in the lease payments is 10%. Co. The agreement is a six-year noncancelable lease requiring annual 2008. The lease is appropriately accounted 1%. Mendez The present value of an annuity due of 1 for 6 years at 10% is 4.7908. The present value of an annuity due of 1 for 6 years at 11% is 4.6959 Required : Determine the amount of lease liability that Mendez should report in its December 31, 2008 balance sheet