At the Beginning of the Current Year, the General Fund

Multiple Choice

At the beginning of the current year, the general fund enters a 3-year lease with these terms: $100,000 is due at signing, and payments of $100,000 per year are due at the end of each of the next two years. The lease agreement carries an interest rate of 3%. The present value of the lease payments is $291,347. At the start of the lease, the general fund:

A) Records $100,000 in other financing uses at the time of the lease signing.
B) Does not record the present value of the lease, but records $100,000 in expenditures with each payment.
C) Records $291,347 as a long-term asset at the time of the lease signing.
D) Records $291,347 in other financing sources at the time of the lease signing.