Mack County has acquired equipment through a non-cancelable lease-purchase agreement dated December 31, 2017. This agreement requires no down payment and the following minimum lease payments:

1. What account should be debited for $120,000 in the general fund at inception of the lease if the equipment is a general fixed asset and Mack does not use a capital projects fund?
2. What account should be credited for $120,000 in the general fixed assets account group at inception of the lease if the equipment is a general fixed asset?
3. What journal entry is required for $120,000 in the general long-term debt account group at inception of the lease if the lease payments are to be financed with general government resources?

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December 2018 2019 2020 Principal $40,000 40,000 40,000 Interest $12,000 7,000 2,000 Total $52,000 47,000 42,000