During the fiscal year ended December 31, 2004, the City of Simonville issued 6%
ID: 2465171 • Letter: D
Question
During the fiscal year ended December 31, 2004, the City of Simonville issued 6% general obligation serial bonds in the amount of $3,000,000 at a premuim $3,060,000. They used $2,970,000 of the proceeds to construct a fire station. The $60,000 premium was transferred to a debt service fund. The $30,000 left in the capital projects fund at the end of the project was transferred to the debt service fund. The bonds were dated April 1, 2004 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2005. How would the bond sale be reported?
A. As a $3,000,000 other financing source in the capital projects fund, a $60,000 other financing source in the debt service fund, and as a $3,000,000 liability in the debt service fund.
B. As a $3,060,000 other financing source in the capital projects fund, a $ 60,000 other financing used in the capital projects fund, a $60,000 other financing source in the debt service fund, and as a $3,000,000 liability in the government-wide Statement of Net Assets.
A. As a $3,000,000 other financing source in the capital projects fund, a $60,000 other financing source in the debt service fund, and as a $3,000,000 liability in the debt service fund.
B. As a $3,060,000 other financing source in the capital projects fund, a $ 60,000 other financing used in the capital projects fund, a $60,000 other financing source in the debt service fund, and as a $3,000,000 liability in the government-wide Statement of Net Assets.
C. As a $3,000,000 revenue in the capital projects fund, a $60,000 revenue in the debt service fund, and a $3,000,000 expenditure in the debt service fund. D. As a $2,950,000 revenue in the capital projects fund and a $50,000 revenue in the debt service fund.Explanation / Answer
Ans option A. As a $3,000,000 other financing source in the capital projects fund, a $60,000 other financing source in the debt service fund, and liability of $3000000 in the debt service fund.
The bond sale be recorded as follows:The par value 6% general obligation serial bond $3000000 will be other financing source in capital project fund,now the premium is $60000 it will be transferred in debt service fund. and the liability will be transferred at par value to $3000000.
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