On January 1, 2010, the City of Verga leased a large truck for five years and made the initial annual payment of $22,000 immediately. The present value of these payments based on an 8 percent interest rate is assumed to be $87,800. The truck has an expected useful life of five years.
a. Assuming that the city's fire department will use the truck, what journal entries should be made for 2010 and 2011 on the government-wide financial statements?
b. Assuming that city's fire department will use the the truck, what journal entries should be made for 2010 and 2011 on the fund-based financial statements?
c. Assuming that the airport (an enterprise fund) operated by the city will use the truck, what journal entries should be made for 2010 and 2011 on the fund-based financial statements?