When Sunny City makes its annual lease payment on an unpaid lease obligation, the journal entry for the governmental activities accounts will include:
A) A debit to Lease Obligation Payable.
B) A credit to Lease Obligation Payable.
C) A debit to Lease Expense.
D) A debit to Expenditures-Principal of Lease Obligation.

Question

Quizplus · Accepted Answer

When Sunny City makes its annual lease payment, the journal entry will include a debit to Lease Obligation Payable to reduce the liability on the balance sheet.

When Sunny City Makes Its Annual Lease Payment on an Unpaid