A Government Enters into a Capital Lease for the Purchase

question 7

Multiple Choice

A government enters into a capital lease for the purchase of a new snow plow.The present value of the future lease payments is $845,500 and there is a down payment at the inception of the lease of $25,000.The snow plow should be recorded in the government-wide statement of net position at:

• A) $ 25,000.
• B) $870,500.
• C) $845,500.
• D) $0.

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