Clavel County Leases an Office Building with a Remaining Economic

question 16

Essay

Clavel County leases an office building with a remaining economic life of 20 years. The fair market value of the building is $6 million. Annual lease payments are agreed at $523,107, based on a 6 percent interest rate. The lease meets the conditions for a capital lease.
1. Record the lease and the first year's interest payment
(a) In a governmental fund
(b) In the government-wide statements
2. Should the office building be depreciated? If so, how and where should depreciation be recorded?

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Definitions:

Total Institutions

Places of residency and work where a large number of like-situated individuals, cut off from wider society for an appreciable period, together lead an enclosed, formally administered round of life.

Prisons

Facilities designed to confine individuals convicted of crimes, aiming to punish, rehabilitate, or both.

Colleges

Institutions of higher learning that offer undergraduate or sometimes graduate degrees in various fields of study.

Medical Model

A framework that views disabilities or illnesses primarily as a problem of the body that requires medical treatment or intervention.