A Five-Year Lease Is Signed by the City of Wachovia

question 26

Multiple Choice

A five-year lease is signed by the City of Wachovia for equipment with a seven-year life. The asset will be returned to the lessor at the end of the lease. The present value of the lease is $20,000, and annual payments of $5,411.41 are payable beginning on the date the lease is signed. The interest portion of the second payment is $1,604.75. The equipment is to be used in City Hall and was purchased from appropriated funds of the General Fund.
What should be recorded in the General Fund on the date the lease is signed?

• A) Option A
• B) Option B
• C) Option C
• D) Option D
• E) Option E

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Definitions:

Lincoln

Abraham Lincoln, the 16th President of the United States, who led the country during the Civil War and is credited with emancipating the slaves.

Savannah

A coastal city in the state of Georgia, known for its well-preserved historic district, cobblestone squares, and significant role in the American Civil War.

Re-elected

Refers to the act of being elected again to a position or office, typically after an initial or preceding term.

Sherman And Sheridan

Two Union generals, William Tecumseh Sherman and Philip Sheridan, known for their strategies and roles in the American Civil War that contributed significantly to the defeat of the Confederate States.