Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 1

A city government has a 9-year capital lease for property being used within the general fund. The lease was signed on January 1, 2015. 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 financial statements as of December 31, 2015, after the first payment has been made
A) $-0-.
B) $59,000.
C) $65,900.
D) $80,000.