The City of Jamestown has agreed to acquire a new city maintenance building under a capital lease agreement. At the inception of the lease, a payment of $100,000 is to be made; nine anual lease payments, each in the amount of $100,000, are to be made at the end of each year after the inception of the lease. The total amount to be paid under this lease, therefore, is $1,000,000. The town could borrow this amount for nine years at the annual rate of 8 percent; therefore, the present value of the lease at inception, including the initial payment, is $724,689. Assume that the fair value of the building at the inception of the lease is $750,000.

a. Show the entry that should be made in a capital projects fund at the inception of the lease after the initial payment has been made.
b. Show the entry that should be made at the inception of the lease in the government activities journal.
c. Show the entry that should be made in the debt service fund and governmental activities journal to record the second lease payment.

1 answer

i dont no
Similar Questions
  1. Mexico City is _____.the capital of Mexico the business capital of Mexico the largest city in North America all of the above
    1. answers icon 1 answer
    1. answers icon 1 answer
    1. answers icon 1 answer
  2. Which description best identifies the largest city in Texas?(1 point)A. This city was the location of the most famous battle of
    1. answers icon 21 answers
more similar questions