On January 1, 2020, a county government leases equipment for three years with these terms: $1,000,000 is due at signing, and payments of $1,000,000 per year are due on January 1 of each of the next two years. The lease agreement carries an interest rate of 3%. Straight-line depreciation over three years, no residual value, is used if appropriate.
Required
Prepare the entries to record events related to this lease on January 1, 2020, December 31, 2020 (the government's year-end), January 1, 2021, and December 31, 2021, assuming that:
a. The equipment is reported in an internal service fund.
b. The equipment is reported in the general fund.
Round all answers to the nearest dollar.

Question

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The Answer of On January 1, 2020, a county government leases equipment for three years with these terms: $1,000,000 is due at signing, and payments of $1,000,000 per year are due on January 1 of each of the next two years. The lease agreement carries an interest rate of 3%. Straight-line depreciation over three years, no residual value, is used if appropriate.
Required
Prepare the entries to record events related to this lease on January 1, 2020, December 31, 2020 (the government's year-end), January 1, 2021, and December 31, 2021, assuming that:
a. The equipment is reported in an internal service fund.
b. The equipment is reported in the general fund.
Round all answers to the nearest dollar.

On January 1, 2020, a County Government Leases Equipment for Three