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Digiron
17 days ago
15

During the fiscal year ended December 31, 2020, the City of Johnstown issued 5% general obligation serial bonds in the amount of

$2,000,000 at 102 ($2,040,000) and used $1,990,000 of the proceeds to construct a fire station. The $40,000 premium was transferred to a debt service fund. The $10,000 left in the capital projects fund at the end of the project was later transferred to the debt service fund. The bonds were dated April 1, 2020 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2021. How would the government account for the transfer of the unused bond proceeds
Business
1 answer:
stepan [3.5K]17 days ago
4 0

Answer:

C) As an alternative financing source in the debt service fund and as an alternative financing use in the capital projects fund.

Explanation:

The content lacks the options:

  • A) As revenue in the debt service fund and as expenditure in the capital projects fund.
  • B) As an alternative financing source in the capital projects fund and as an alternative financing use in the debt service fund.
  • C) As an alternative financing source in the debt service fund and as an alternative financing use in the capital projects fund.
  • D) As a special item recorded in both the debt service and capital project funds.

Accounts for other financing sources are utilized by governments to register revenues and expenses not tied to operational activities. The debt service fund consists of the funds that the government has allocated to cover its outstanding obligations. The capital projects fund is where the government tracks expenditures relating to designated projects.

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