Kendall County entered into a lease agreement to finance computer equipment used in governmentoffices. The lease covers three years, and county officials are reasonably certain that funding andapprovals will be renewed annually. At the inception of the lease, a payment of $150,000 will be made;two additional annual lease payments of $150,000 are to be made near the end of each year. The totalamount to be paid under this lease is $450,000. The lease arrangements implied an annual interest rate of3 percent. Therefore, the present value of the lease at inception, including the initial payment, is $437,020.Assume that the fair value of the equipment at the inception of the lease is $445,750. Required Prepareentries required to record the inception of the lease in the General Fund, the debt service fund, and thegovernmental activities journal. Prepare entries required to record the payment at the end of the first yearof the lease in both the debt service fund and governmental activities journal. c-1. Which financialstatement prepared at the end of the first year would show both the asset and the liability related to thislease? c-2. What amount would the liability be reported at the end of the first year?Transaction1. Record the inception of the lease.Fund/Governmental Activties General Journal Debit Credit1General FundDebt Service FundGovernmental Activities.Record the payment at the end of the yeardebit service fund⚫governmental activities

Name: Kendall County entered into a lease agreement to finance computer equ
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Description: Kendall County entered into a lease agreement to finance computer equipment used in governmentoffices. The lease covers three years, and county officials are reasonably certain that funding andapprovals will be renewed annually. At the inception of

A.FundParticulars Debit Credit Capital project fundExpendixcture - other financing…

Answered: What amount would the liability be…

Business

Accounting

What amount would the liability be reported at the end of the first year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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