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A government enters into a lease agreement for the purchase of a new snow plow. The present value of the future lease payments is $845,500 and there is a down payment at the inception of the lease of $25,000. The snow plow should be recorded in the General Fund at:

Respuesta :

Answer:

$870,500

Explanation:

The computation of the snow plow should be recorded in the General Fund is shown below:

= The present value of the future lease payments + down payment at the inception of the lease

= $845,500 + 25,000

= $870,500

We simply added the above two items i.e present value and the down payment  so that the correct amount could arrive

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