A Government Entered into a General Government Capital Lease in the Prior

A government entered into a general government capital lease in the prior year. During the current year, a lease payment of $50,000, which includes implicit interest of $12,000, was made from the General Fund. What effect does the $50,000 payment have on the General Capital Assets and General Long-Term Liabilities accounts?

A) Increases net investment in capital assets by $38,000.
B) Increases capital assets $50,000.
C) Increases capital assets by $38,000.
D) Decrease capital lease liability by $50,000.