An Enterprise Fund entered into a capital lease for the purchase of equipment. The capitalizable cost of the asset was $300,000 and fund made a $30,000 down payment. In the year of inception the Enterprise Fund would report

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Capital leases are treated as the acquisition of an asset and the incurrence of an obligation. The enterprise fund would report the equipment as a capital asset at its capitalizable cost of $300,000, regardless of the down payment made.

An Enterprise Fund Entered into a Capital Lease for the Purchase