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thank you for joining us for this episode of the ultimate least accounting series in our previous video we defined a lease liability as the present value of the remaining lease payments and I also walked through various types of lease payments as allowed under ASD 842 today Im going to explain how to calculate both the lease liability and the right abuse asset then walk through examples of each lets get started sample 4 from the ultimate lease accounting guide how to calculate the lease liability so for this example were dealing with tenaco a private company with a calendar year end in a January 1st 2022 transition date the dates for the lease agreement we already reviewed in our third example but were going to talk about some of the payment terms so this agreement has a lease term for five years with two five-year renewal options both of which theyve already decided are reasonably starting to be exercised also the tenant has a purchase option available to them for a hundred thou