The City of Roswell Has a 6/30 Fiscal Year-End

The City of Roswell has a 6/30 fiscal year-end.The City uses the consumption method for recognizing inventories and prepayments.On July 1, 2010, the City leased computer equipment for use in the City's general activities.The lease is a three-year lease that qualifies as an operating lease.The City prepaid the entire three-year rental fee of $45,000.At June 30, 2011, the appropriate account balances in the General Fund associated with this transaction would be

A) Prepaid lease $0; Expenditures $45,000; Fund balance reserved for prepaid lease $0.
B) Prepaid lease $30,000; Expenditures $15,000; Fund balance reserved for prepaid lease $30,000.
C) Prepaid lease $30,000; Expenditures $45,000; Fund balance reserved for prepaid lease $30,000.
D) Prepaid lease $30,000; Expenditures $15,000; Fund balance reserved for prepaid lease $0.