When Sunny City Makes Its Annual Lease Payment on an Unpaid

Multiple Choice

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

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