Star City Leased a Bulldozer for Use in Activities Accounted

question 42

Multiple Choice

Star City leased a bulldozer for use in activities accounted for in the General Fund.The City paid $40,000 and agreed to pay $40,000 per year for 3 years.The bulldozer has a useful life of six years.The lease qualified as a capital lease.Assuming that the city maintains is books and records in a manner that facilitates the preparation of the government-wide financial statements, the appropriate entry at the date of acquisition would be

• A)Debit Expenditures $160,000; Credit Cash $40,000 and Other financing sources $120,000.
• B)Debit Expenditures $53,333 and Prepaid lease $106,667; Credit Cash $40,000 and Other financing sources $120,000.
• C)Debit Equipment $160,000; Credit Cash $40,000 and Lease payable $120,000.
• D)Debit Expenditures $160,000; Credit Cash $40,000 and Lease payable $120,000.

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Definitions:

Premodernity

A period in history characterized by the absence of modern technology and ideas, often demarcated before the development of industrial societies.

Postmodernity

A cultural, intellectual, or artistic state lacking a clear central hierarchy or organizing principle, breaking with classical and modernist concepts, often emphasizing skepticism and relativism.

Relational Theory

A framework in psychology and sociology that emphasizes the importance of relationships and interconnectedness among individuals in understanding their behaviors and identities.

Human Subjectivity

The condition of being a subject with unique thoughts, feelings, and perspectives, shaped by social, cultural, and personal contexts.