4. A city government has a nine-year capital lease for property being used within the General Fund. The lease was signed on January 1,2008. Minimum lease payments total $90,000 starting at the end of the first' year but have a current present value of $69,000. Annual payments are $10,000, and the interest rate being applied is 10 percent. When the first payment is made on December 31, 2008, which of the following recordings is made?

Government-Wide Statements Fund-Based Statements

a. Interest Expense $-0-

b. Interest Expense $6,900

c. Expenditures $10,000

d. Interest Expense $6,900 Interest Expense $-0- Expenditures $6,900 Expenditures $10,000 Expenditures $10,000