Item 10 Item 10 Francisco leased equipment from Julio on December 31, 2018. The lease is a 10-year lease with annual payments of $157,000 due on December 31 of each year beginning December 31, 2018. The present value of the lease payments is $1,060,000. Francisco's incremental borrowing rate is 12% for this type of lease. The implicit rate of 8% is known by the lessee. What should be the balance in Francisco lease liability at December 31, 2019?