For each of the following, indicate whether the statement is true or false and include a brief explanation for your answer.

h. A lease for a communications system (that has a six-year life) is signed on January 1, Year 1, with six annual payments of $16,500. The communications system is to be used by the police department. The first payment is to be made immediately. The present value of the $99,000 in cash flows is $71,862 based on a 10 percent rate. Government- wide financial statements for Year 1 should report expenses of $22,036.