Choice "A" is correct. A lease, which represent the acquisition of a general capital asset, should be accounted for in the same manner as a purchase and source of financing. The acquisition should be recorded in the fund acquiring the asset as an expenditure and the financing as an increase in other financing sources. If the fund acquiring the asset is a governmental fund, the asset should be recorded as general capital assets and the lease obligation should be should be recorded in the general long-term liabilities. Both non-current accounts appear in the governmental activities column of the government-wide statement of net assets. The journal entry in the acquiring fund is:

Choices "b", "d", and "c" are incorrect per journal entry explanation above.