Final answer:
To determine the reduction in the lease liability for Ivanhoe Corp in the second full year of the lease, we need to consider the present value of the future lease payments and the timing of those payments.
Step-by-step explanation:
To determine the reduction in the lease liability for Ivanhoe Corp in the second full year of the lease, we need to consider the present value of the future lease payments and the timing of those payments. Without specific information about the lease terms, we cannot provide an exact amount. However, we can provide an example to illustrate how the reduction in the lease liability can be calculated.
Let's say the future lease payments are as follows: $10,000 in the first year, $15,000 in the second year, and $20,000 in the third year. Suppose the interest rate is 5%.
To calculate the present value of these future lease payments, we discount each payment by the interest rate and the number of years in the future. For example, the present value of the $10,000 payment in the first year would be $10,000 / (1 + 0.05) = $9,524. The same calculation is done for the other payments.
Once we have the present value of all the lease payments, we can subtract it from the initial present value of $1,700,000 to determine the reduction in the lease liability for the second full year.