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Cabarrus County, North Carolina <br /> Notes to the Financial Statements <br />For the Year Ended June 30, 2012 <br />On July 1, 2011 the County entered into a lease agreement as lessee for financing the acquisition of 911 <br />Equipment. Payments consist of $136,623 annually with an effective rate of 3.00%. This lease agreement <br />qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of <br />their future minimum lease payments as of the date of inception. <br />The assets acquired through a capital lease are as follows: <br />Governmental <br />Activities <br />County owned Asset: <br /> Equipment $ 603,312 <br /> Land 3,421,394 <br /> Less: Accumulated depreciation (4,058) <br /> Total $ 4,020,648 <br />The future minimum lease obligation and the net present value of these minimum lease payments as of June <br />30, 2012, were as follows: <br /> Governmental <br /> Year Ending June 30 Activities <br />2013 $ 326,623 <br />2014 326,623 <br />2015 326,623 <br />2016 326,623 <br />2017 190,000 <br />2018 190,000 <br />2019 190,000 <br />2020 <br /> 190,000 <br />2021 <br /> 190,000 <br />Next 5 Years 950,000 <br />To Maturity 2,280,000 <br />Total minimum lease payments 5,486,492 <br />Less: amount representing interest (1,955,385) <br />Present value of minimum lease payments $3,531,107 <br />2. Operating Leases <br />The County leases building, equipment and office facilities under non-cancelable operating leases. Total costs <br />for the leases were $971,227 for the year ended June 30, 2012. The future minimum lease payments for this <br />lease are as follows: <br />J. Long-term Obligations <br />1. General Obligation Indebtedness <br />General obligation bonds are issued to provide funding for the construction of capital facilities used for general <br />government activities. All general obligation bonds are collateralized by the full faith, credit, and taxing power of <br />57 <br />