How Should a Fixed Asset Acquired Through a Capital Lease

question 28

Multiple Choice

How should a fixed asset acquired through a capital lease agreement be recorded in a General Fund?

• A)at the present value of the future lease payments,by debiting expenditures and crediting other financing sources - capital leases
• B)at the total amount of the future lease payments,by debiting expenditures and crediting other financing sources - capital leases
• C)at the present value of the future lease payments,by debiting expenditures and crediting capital leases payable.
• D)no entry is needed until payments are actually made on the capital lease agreement.

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Definitions:

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