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Lease Transactions On July 1,2019, suppose the City of Olympia, Washington leased a parking lot, agreeing to pay $200,000 at the start of the lease, and make five annual payments of $200,000 per year on June 30 of each subsequent year. The lease carries an interest rate of 4%. The county's fiscal year ends June 30 , and straight-line depreciation is used, if appropriate. Required Prepare the entries to record the lease agreement and payments on July 1,2019, june 30, 2020, and june 30, 2021, assuming a, the lease is recorded in the general fund. b. the lease is recorded in an enterprise fund. Instructions: - Use a financial calculator or Excel to compute the value of the capital lease. - Round answers to the nearest whole number. - Use rounded answers for subsequent computations (and then round to the nearest whole number.) \begin{tabular}{|c|c|c|c|c|c|} \hline & To record initial sign & & & & \\ \hline & Lease liability & & & & \\ \hline & & & x & 250,000 & 0 \\ \hline & Cash & ^ & & 0 & 250,000 \\ \hline & To record first payment on lease. & & & & \\ \hline \multirow[t]{4}{*}{6/30/20} & Expenditures-interest & & & 200,000 & 0 \\ \hline & Expenditures-principal & ^ & & 35,615 & 0 \\ \hline & Cash & & & 0 & 235.615 \\ \hline & To record 2020 payment on lease: & & & & \\ \hline \multirow[t]{4}{*}{6/30/21} & Expenditures-interest & & & 200,000 & 0 \\ \hline & Expenditures-principal & & & 6,575 & 0 \\ \hline & Cash & & & 0 & 206,575 \\ \hline & To record 2021 payment on lease. & & & & \\ \hline \end{tabular} b. \begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{6}{|c|}{ Enterprise Fund } \\ \hline Date & Description & & & Debit & Credit \\ \hline \multirow[t]{6}{*}{7/1/19} & Leased capital assets, net & ^ & & 1,362,956 & 0 \\ \hline & Lease liability & & & 0 & 1,362,956 \\ \hline & To record initial signing of lease. & & & & \\ \hline & Lease liability & & & 250,000 & \\ \hline & Cash & ^ & & 0 & 250,000 \\ \hline & To record first payment on lease. & & & & \\ \hline \multirow[t]{3}{*}{6/30/20} & Expenditures-interest & & & 44,518 & 0 \\ \hline & Lease liability & & & 205,482 & 0 \\ \hline & Cash & & & 0 & 250,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|} \hline & Enterprise & & & & & & \\ \hline Date & Description & & & Debit & & Credit & \\ \hline 7/1/19 & Leased capital assets, net & & & 1,362,956 & x & 0 & \\ \hline & Lease liability & & & & & 1,362,956 & x \\ \hline & To record initial signing of lease. & & & & & & \\ \hline & Lease liability & & & 250,000 & x & 0 & \\ \hline & Cash & & & 0 & & 250,000 & x \\ \hline & To record first payment on lease. & s. & & & & : & \\ \hline 6/30/20 & Expenditures-interest & & & 44,518 & & 0 & \\ \hline & Lease liability & & & 205,482 & x & 0 & \\ \hline & Cash & & & 0 & & 250,000 & x \\ \hline & To record 2020 payment on lease. & & & & & = & \\ \hline & Depreciation & ^ & & 272,591 & x & 0 & \\ \hline & Leased capital assets, net & ^ & & 0 & & 272,591 & x \\ \hline & To record 2020 depreciation expense. & & & & & & \\ \hline 6/30/21 & Expenditures-interest & & & 36,299 & x & 0 & \\ \hline & Lease liability & ^ & & 213,701 & x & 0 & \\ \hline & Cash & ^ & & 0 & & 250,000 & x \\ \hline & To record 2021 payment on lease. & & & & & & \\ \hline & Depreciation & & & 272,591 & x & 0 & \\ \hline & Leased capital assets, net & & & 0 & & 2,2,591 & x \\ \hline & Tn rerard 3021 denre & & & & & & \\ \hline \end{tabular}

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