Question
On January 1, 2017, the Mount Rogers City water department leases a truck under a noncancelable lease agreement meeting the requirments for classification as a
On January 1, 2017, the Mount Rogers City water department leases a truck under a noncancelable lease agreement meeting the requirments for classification as a capital lease. The present value (8% interest) of the minimum lease payment is $45000, and the lease calls for five annual lease payments of $10435 every January 1, begining in 2017. The leased truck has a five year life and no salvage. 1. Prepare journal entries for the first year of the lease. 2. How would the lease be reflected in the Statement of Cas Flows prepared for the enterprise fund for the year ending December 31, 2017?
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