A government signed a five year capital lease on

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Chapter 16 / Exercise 7
Accounting Using Excel for Success
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122.A government signed a five-year capital lease on January 1, 2014 to obtain some equipment. The lease provided that the government would make a down payment of $10,000 and four $10,000 payments each year after that, beginning January 1, 2014. The government has a fiscal year ending December 31. Upon inception of the lease, the government, in its governmental fund accounting records would: A)Debit expenditures for $10,000 and credit cash for $10,000. B)Debit expenditures for $50,000, credit cash for $10,000, and credit accounts payable for $40,000. C)Debit expenditures for the present value of the payments (including the $10,000), credit cash for $10,000, and credit accounts payable for the difference between the $10,000 and the present value of the future payments. D)Debit expenditures for the present value of the payments (including the $10,000), credit cash for $10,000, and credit other financing sources for the difference between the $10,000 and the present value of the future payments. Answer: D A government entered into a capital lease agreement to acquire equipment for the general government on January 1, 2014. Five payments of $8,000 each are to be made, beginning on December 31, 2014. Discounting is at 6%, computed annually. The present value of the five payments is $33,699.
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Accounting Using Excel for Success
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Chapter 16 / Exercise 7
Accounting Using Excel for Success
Reeve/Warren
Expert Verified
123.Which of the following would be true as of January 1, 2014?
124.Premiums generated from the issuance of bonds for a capital projects fund are generally:
B125.The following are sources of funds for the debt service fund except:
D

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