A Government Entered into a Capital Lease Agreement to Acquire

question 61

Multiple Choice

A government entered into a capital lease agreement to acquire equipment for the general government on January 1, 2017. Five payments of $9,000 each are to be made, beginning on December 31, 2017. Discounting is at 6%, computed annually. The present value of the five payments is $37,911. Which of the following would be true as of January 1, 2017?

• A) An entry would be made debiting Expenditures and crediting Other Financing Sources-Capital in a governmental fund, both in the amount of $45,000.
• B) An entry would be made debiting Equipment and crediting Capital Payable in a governmental fund, both in the amount of $37,911.
• C) An entry would be made debiting Capital Expenditure and crediting Capital Payable in a governmental fund, both in the amount of $37,911.
• D) An entry would be made debiting Expenditures and crediting Other Financing Sources-Capital in a governmental fund, both in the amount of $37,911.

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Definitions:

Dispositional Attribution

The tendency to attribute someone's behavior to their disposition or personality rather than to external factors.

Defensive Attribution

A tendency to attribute more blame to the victims of accidents for their misfortune the more severe the accident was, often as a way to see the world as just and predictable.

External Attribution

The process of attributing the cause of one's own or others' behaviors to external factors or situations.

Ingroup

A social group to which a person psychologically identifies as being a member, often fostering a sense of belonging or identity.