Fricke City has a December 31 fiscal year-end and enters into a lease for a fleet of snow removal trucks. These are the details regarding the lease agreement 8/1/2013 Date of the inception of the lease Does ownership transfer at the end of the lease? Do the lease terms contain a bargain purchase option? Lease term Economic life of the asset Fair value of the asset at the inception of the lease Lease payments Present value of future minimum lease payments as of lease inception date Implicit rate 0 0 3 yearS 4 years $222,000 $75,000 $212,683 5% 10/1/2013 10/1/2014 10/1/2015 First, determine whether the lease should be treated as capital or operating. Then, the transactions below should be recorded in the general fund (which will also be responsible for the lease payments) and the government-wide governmental activities Record any necessary entry at the inception of the lease on 8/1/2013 Record the first lease payment on 10/1/2013 Record year-end closing entries on 12/31/2013, including depreciation expense using the straight line method. Record the lease payment on 10/1/2014 Record year-end closing entries on 12/31/2014, including depreciation expense using the straight line method. Record the lease payment on 10/1/2015 Record year-end closing entries on 12/31/2015, including depreciation expense using the straight line method. Record year-end closing entries on 12/31/2016, including depreciation expense using the straight line method. 1. 2. 3. 4. 5. 6. 7. 8