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Jordan Adelson from 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 is accounting after the initial recording. An example given is a five-year lease with annual payments of $1.1 million, with the first payment due at commencement and subsequent payments at the end of each year. A lease incentive of $100,000 is provided by the lessor.