Big City recently lost a lawsuit relating to an incident involving one of their police officers. A judgment was rendered against

the city, and, immediately prior to the current fiscal year end, the city was ordered to pay a total of $$500,000.$ $$100,000$ is

due immediately and the remaining is to be paid in installments of $$100,000$ per year for an additional four years. How will

the external financial statements of the city be affected in the year the court case was settled?

The General Fund statements should report both expenditures and a claims and judgments liability of

$$500,000.$

The General Long$-$Term Liabilities accounts should report a $$500,000$ liability.

The General Fund statements should report expenditures and a current liability of $$100,000,$ and the

Custodial Fund should report a liability of $$400,000.$

The General Fund statements should report expenditures and a current liability of $$100,000,$ and the

government$-$wide statements should report a long$-$term liability of the present value of the $$400,000.$