Homework answers / question archive / Use the following to answer the next five questions: On October 1, 2014, the City of Mizner issued $4,000,000 in 4%, general obligation bonds at 101 for the purpose of constructing an addition to City Hall

Use the following to answer the next five questions: On October 1, 2014, the City of Mizner issued $4,000,000 in 4%, general obligation bonds at 101 for the purpose of constructing an addition to City Hall

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Use the following to answer the next five questions:

On October 1, 2014, the City of Mizner issued $4,000,000 in 4%, general obligation bonds at 101 for the purpose of constructing an addition to City Hall. The premium was transferred to a debt service fund. A total of $3,975,000 was used to construct the addition, which was completed prior to June 30, 2015. The remaining funds were transferred to the debt service fund. The bonds were dated October 1, 2014, and paid interest on April 1 and October 1. The first of 20 annual principal payments of $200,000 is due October 1, 2015.  The fiscal year for Mizner is July 1- June 30.

 

1. In addition to a $4,000,000 liability in the government-wide Statement of Net Position, how would the bond sale be reported?

            A)  As a $4,040,000 other financing source in the capital projects fund, a $40,000 other financing use in the capital projects fund, and a $40,000 other financing source in the debt service fund.

            B)   As a $4,000,000 other financing source in the capital projects fund, a $40,000 other financing source in the debt service fund, and as a $4,000,000 liability in the debt service fund.

            C)   As a $4,000,000 revenue in the capital projects fund, a $40,000 revenue in the debt service fund, and a $4,000,000 expenditure in the debt service fund.

            D)  As a $3,975,000 revenue in the capital projects fund and a $25,000 revenue in the debt service fund.

2. In addition to a capital asset in the government-wide Statement of Net Position, how would the construction costs of $3,975,000 be reported at year-end?

1. As an expenditure of the capital projects fund and an expense in the government-wide Statement of Activities.
2. As an expenditure of the capital projects fund and a capital asset in the government-wide Statement of Net Position.
3. As an expenditure of the capital projects fund only.
4. As a capital asset in the Statement of Net Position only.

           

 

3. What amount would be reported as debt service expenditures in the year ended June 30, 2015?

            A)  $        -0-.

            B)   $  80,000.

            C)   $160,000.

            D)  $360,000.

  

4. What would be the amount of debt service expenditures reported in the fiscal year ended June 30, 2016?

            A)  $160,000.

            B)   $200,000.

            C)   $360,000.

            D)  $400,000.

 

5. How would the government account for the unused bond proceeds?

            A)  As a revenue in the debt service fund and as an expenditure in the capital projects fund.

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

            C)   As an other financing source in the government-wide Statement of Activities.

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