Please help, thank you!

At the beginning of the fiscal year, a general fund leases property. The lease has a term of 5 years. At the

time the lease is initiated, the present value of the future lease payments is $3,000,000. The lease agreement

reflects an implicit interest rate of 4 percent. The first payment of $500,000 is made at the end of the fiscal

year. On its operating statement for the year, the general fund reports

a. other financing sources of $3,000,000 and a capital outlay expenditure of $500,000.

b. a capital outlay expenditure of $500,000.

c. a capital outlay expenditure of $3,000,000 and other financing sources of $3,000,000, an expenditure

for interest of $120,000, and an expenditure for principal of $380,000.

d. an expenditure for interest of $120,000.