Fundamentals of Advanced Accounting 5th Edition by Joe Ben Hoyle,Thomas Schaefer,Timothy Doupnik

Exercise 16

A city government has a nine-year capital lease for property being used within the General Fund. The lease was signed on January 1, 2010. Minimum lease payments total $90,000 starting at the end of the first year but have a current present value of $69,000. Annual payments are $10,000, and the interest rate being applied is 10 percent. What liability is reported on the fund-based financial statements as of December 31, 2010, after the first payment has been made
a. $-0-.
b. $59,000.
c. $65,900.
d. $80,000.