Author Question: A city acquires equipment on January 1, 2013 by means of a capital lease agreement. The agreement ... (Read 67 times)

lindiwe

  • Hero Member
  • *****
  • Posts: 577
A city acquires equipment on January 1, 2013 by means of a capital lease agreement. The agreement calls for paying the leasing company 300,000 in three 100,000 annual payments, starting December 31, 2013 .
 
  The present value of the three lease payments, using a 6 interest rate, is 267,300 . The city will make the lease payments from the General Fund. What journal entry should the city make on January 1, 2013 in the Fund?
   a. debit expenditures - capital outlay; credit other financing sources, for 300,000
   b. debit expenditures - capital outlay; credit other financing sources, for 267,300
   c. debit capital assets; credit capital leases payable, for 300,000
   d. debit expenditures - capital outlay; credit capital leases payable, for 267,300

Question 2

No entries are made in the Posting Reference column in a two-column journal when journalizing.
 a. True
   b. False
   Indicate whether the statement is true or false



coreycathey

  • Sr. Member
  • ****
  • Posts: 333
Answer to Question 1

b

Answer to Question 2

True



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Did you know?

The types of cancer that alpha interferons are used to treat include hairy cell leukemia, melanoma, follicular non-Hodgkin's lymphoma, and AIDS-related Kaposi's sarcoma.

Did you know?

The most common childhood diseases include croup, chickenpox, ear infections, flu, pneumonia, ringworm, respiratory syncytial virus, scabies, head lice, and asthma.

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

For a complete list of videos, visit our video library