Exam 6: Accounting for Capital Projects and Debt Service

The City of Twin Falls issued $5 million in special assessment bonds to finance major reconstruction of the turbines and facilities used in generating electricity that is sold to the citizens in the surrounding area.The electric power distribution activities are accounted for in an enterprise fund,which service the debt.If the city is NOT legally obligated for the debt,the appropriate entry in the city's Electric Enterprise Fund to record this event is

In the debt service fund

In the capital projects fund

Avon City issued bonds for the purpose of financing a major capital improvement.Which fund is the most appropriate fund in which to record the receipt of the bond proceeds?

The amount of interest payable assuming an outstanding balance of $4,000,000 of bonds)that should be included on the balance sheet for the debt service fund of the City of Russell at June 30,2015 is

Six years ago Hill City issued $10 million of 6 percent term bonds,due 30 years from the date of issue.Interest on the bonds is payable semi-annually on January 1 and July 1.Hill City has a September 30 fiscal year-end.The amount of interest payable that should be included on the balance sheet for the debt service fund of Hill City at September 30 is

The proceeds of the bond issue should be recorded in which fund of the City of Arlington?

Sue City has outstanding $5 million in general obligation term bonds used to finance the construction of the new City Library.Sue City has a June 30 fiscal year-end.Interest at 6 percent is payable each January 1 and July 1.The principal of the bonds is due 10 years in the future.The city budgeted the July 1,2015 interest payment in the budget for the fiscal year ended June 30,2015.On June 30,cash was transferred from the general fund to the debt service fund to make the required payment.The maximum amount of interest payable that may be included on the balance sheet of the debt service fund of Sue City at June 30 is

The interest paid on debt issued for public purposes by state and local governments is generally subject to federal taxation.

Capital projects funds do not report long-term obligations in the fund.

In which fund type would a government's capital projects fund be found?

The debt service fund of a government is accounted for using which of the following bases of accounting?

How should Lewis County account for the amount transferred on June 20 if the county maintains its books and records in a manner that facilitates the preparation of fund financial statements?

In accounting for costs incurred on a major construction project in a capital projects fund,the construction outlays would be reported in the fund as general capital assets.

Previously Atomic City had issued bonds with a face value of $10 million to construct a new city hall.Because the money will not be needed for several months,the city invested the bond proceeds in U.S.Government securities.Assume that the city maintains its books and records in a manner that facilitates the preparation of fund financial statements.What is the appropriate entry when the city receives interest on the investments?

The amount of bonds payable that should be included on the balance sheet for the debt service fund of the City of Russell at June 30,2015 is

Salt City issued $5 billion of bonds at face value to fund the reconstruction of major interstate highways in and around the city.The bond underwriters withheld $2 million for underwriting fees and remitted the balance to the city.Assuming the city maintains its books and records in a manner that facilitates the preparation of fund financial statements,how should the underwriting fee be recorded in the capital projects fund?

Governments are required to integrate budgetary account information in their debt service and capital projects funds only when control cannot readily be established by means other than a budget.

When governments establish capital projects funds,they may choose to maintain a separate fund for each major project,or they may choose to combine two or more projects in a single fund.

What entry should be made on July 1 related to the interest payment?