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Jordan Adelson, a senior manager at PwC's national office, discusses how lessees record lease liabilities and right of use assets for operating and finance leases. Day 1 accounting is the initial recording of the lease, while day 2 accounting is after the initial recording. An example given includes a 5-year lease with $1.1 million annual payments starting at commencement. A $100,000 lease incentive is provided by the lessor.