There are two lines I don't understand here, and they aren't the ones you noted. I'm kinda lost on the first two.

Let me run through this one.

I presume you've already done the base case so I won't redo that.

We are assuming that, for some value of k:

We need to show that this is true for the k + 1 case. So consider

But we know that

So

<-- (1)

Thus

<-- (2)

We also know that

<-- This step is easy to show. I leave it to you.

Thus

The lines I have labeled as (1) and (2) are what I think your lines 1 and 2 are meant to have been.

-Dan