A , B , C

4 value 10.00 points The City of Rochester signed a 30-year agreement with East Coast Real Estate, Inc. to lease a newly- constructed building for city services. The city agrees to make an initial payment of $2,600,000 and annual payments of $781,040 for the next 29 years. Using an assumed borrowing rate of 8 percent, the present value of the lease payments is approximately $11,315,200. At the time the lease agreement is signed, the building had an appraised market value of $12 million and an estimated life of 40 years Required a-1. Should the city consider this agreement a capital lease? O Yes No a-2. Complete the following criteria's in relation to decision making (Do not round, intermediate calculations. Round your answers to 1 decimal place.) 1 Present value of minimum lease payment as a percentage of fair value 2 Lease term as a percentage of estimated useful life of building b. Provide journal entries the city should make for both the capital projects fund and govenmental