The town could borrow this amount for nine years at the annual rate of $4$ percent; therefore, the present value of the lease at

inception, including the initial payment, is $$843,533.$ Assume that the fair value of the building at the inception of the lease is

$$850,000.$

Prepare the entry that should be made in a capital projects fund at the inception of the lease. $($If no entry is required for a

transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.$)$

Journal entry worksheet

Record the entry that should be made in the capital projects fund at the

inception of the lease.

Note: Enter debits before credits.

Journal entry worksheet

$1$

Record the entry that should be made in the capital projects fund at the

inception of the lease.

Note: Enter debits before credits.

Journal entry worksheet

$1$

Record the entry that should be made at the

inception of the lease in the

government activities journal.

Note: Enter debits before credits.