When Sunny City Makes Its Annual Lease Payment on an Unpaid

Multiple Choice

When Sunny City makes its annual lease payment on an unpaid lease obligation, the journal entry for the debt service fund accounts will include:

A) A debit to Lease Obligation Payable.
B) A credit to Lease Obligation Payable.
C) A debit to Lease Expense.
D) A debit to Expenditures-Principal of Lease Obligation.