A Capital Lease Was Used to Acquire Equipment Used by the Police

A capital lease was used to acquire equipment used by the Police Department,part of the general government.How should the lease be recorded in the governmental activities accounts at the inception of the lease?

A) Fair value.
B) Present value of minimum lease payments.
C) Lower of fair value or present value of minimum lease payments.
D) Leased assets are not recorded in the governmental activities accounts.