When Sunny City Makes Its Annual Lease Payment on an Unpaid

question 46

Multiple Choice

When Sunny City makes its annual lease payment on an unpaid capital lease obligation,the journal entry for the debt service fund accounts will include:

• A) A debit to Capital Lease Obligation Payable.
• B) A credit to Capital Lease Obligation Payable.
• C) A debit to Capital Lease Expense.
• D) A debit to Expenditures-Principal of Capital Lease Obligation.

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Definitions:

Confidential Information

Sensitive information not intended for public knowledge, often protected by law or through confidentiality agreements.

Agency Law

A legal doctrine focusing on the relationship between a principal and their agent, including the rights and duties that arise.

Conflicting Duties

Situations where an individual or entity has responsibilities that are at odds with each other, making it difficult to fulfill both.

Apparent Authority

Apparent authority refers to a situation where a reasonable person would understand that an agent has the authority to act on behalf of a principal, even if the agent does not have actual authority.