Carter County Entered into a Capital Lease to Finance an Emergency-911

Short Answer

Carter County entered into a capital lease to finance an Emergency-911 telecommunications system. The capitalizable cost of the equipment was $185,000. The county made a required down payment of $25,000. The first debt service payment will not be due until the next fiscal year. The entry to record the inception of this lease in the General Fund would be $\begin{array}{llr}&&\text { Debit }&\text {Credit }\\ \text { A.} & \text { Expenditures. } &\$185,000\\& \text { Lease Payable } &&\$16,000\\& \text { Cash.} &&25,000\\ \text { B.} & \text { Expenditures. } &\$185,000\\ &\text { Other Financing Source} &&\$160,000\\& \text { Cash. } &&25,000\\ \text { C. } & \text { Capital Asset } &\$185,000\\ &\text { Lease Payable } &&\$160,000\\& \text { Cash. } &&25,000\\ \text {D. } & \text { Capital Asset } &\$185,000\\ &\text { Other Financing Source } &&\$160,000\\& \text { Cash.} &&25,000\\\end{array}$