$620.$ Lease Agreement. $($LO$6-5)$ McCormick County agreed to acquire a new recreation equipment storage facility under a lease financing agreement. At the inception of the lease, a payment of $$750,000$ will be made; four additional annual lease payments, each in the amount of $$750,000,$ are to be made at the $254$ Part One State and Local Governments end of each year, beginning late in the current year. The total amount to be paid under this lease is $$3,750,000.$ The lease arrangements implied an annual interest rate of $6$ percent. Therefore, the present value of the lease at inception, including the initial payment, is $$3,348,829.$ Assume that the fair value of the building at the inception of the lease is $$3,600,000.$

Required

a$.$ Show the entries required to record the inception of the lease in the capital projects fund, the debt service fund, and the governmental activities journal.

b$.$ Show the entries required to record the payment at the end of the first year of the lease in both the debt service fund and governmental activities journal.

c$.$ Which financial statement$($s$)$ prepared at the end of the first year would show both the asset and the liability related to this lease? At what amount would the liability be reported?