Jamestown Has Decided to Enter into a Capital Lease for the Purchase

Multiple Choice

Jamestown has decided to enter into a capital lease for the purchase of its new recycling truck. The capitalizable cost of the capital asset is $175,000 and Jamestown made a $30,000 down payment at the inception of the lease agreement. The estimated useful life of the truck is ten years with $0 salvage value. Which of the following statements is false?

A) General Fund fund balance will be reduced by $175,000.
B) Other financing sources of $145,000 will be reported in Year 1.
C) Expenditures of $175,000 will be reported in Year 1.
D) Depreciation expense on the truck will be $17,500 per year.