Exam 6: Accounting for General Long-Term Liabilities and Debt Service

Taxes for debt service are always levied by the General Fund and transferred to a debt service fund.

The General Fund of the city of Castle Rock transfers $115,000 to the debt service fund for a $100,000 principal and $15,000 interest payment.The recording of this transaction would include

Which of the following financial statements are required for a Debt Service Fund?

The city of New Haven issued $20 million of tax-supported bonds at 102 to finance a new prison.Upon issuance,how will the premium be recorded?

On June 1,2015,Brooktown levied special assessments in the amount of $500,000,payable in 10 equal annual installments beginning on June 30,2015.The assessment installments are intended to pay principal and interest on special assessment bonds for which the town has pledged its full faith and credit should assessments be insufficient.Assuming no allowance for uncollectible receivables,the journal entry in the debt service fund on June 1,2015 would include:

Immediately after making its annual $20,000 lease payment on June 30,2014,the last day of its fiscal year,Capitol City had an unpaid capital lease obligation of $95,000.The interest rate applicable to the lease is 10 percent.When the $20,000 lease payment due on June 30,2015 is made,the journal entry for the governmental activities accounts will include

Although some governments have issued taxable debt,the interest earned on most debt issued by state and local governments is exempt from federal taxation and,in some states,from state taxation.

General obligation bonds issued for the benefit of enterprise funds,with the intent of paying bond principal and interest from revenues of the enterprise fund,should be reported as a liability in the balance sheet of the

Debt margin is the difference between the debt limit and the amount of outstanding debt subject to the debt limitation.

"All taxes raised for payment of interest and principal on general long-term debt are recognized as other financing sources of the debt service fund." Do you agree? Why or why not?

On the due date for bond interest,the debt service fund journal entry (or entries)will include

The liability for general obligation bonds should be recorded in the

Which of the following is not true?

Which of the following resource inflows would be recorded as a revenue of a debt service fund?

Special assessment debt that carries governmental backing should be reported as "special assessment debt with governmental commitment".

The sale of revenue bonds by a water utility fund would be recorded

Installments of special assessments to be collected within one year are recorded as Assessments Receivable-Current; installments due in periods after one year are recorded as Assessments Receivable-Deferred.

Which of the following statements is true?

The General Fund of the city of Castle Rock transfers $115,000 to the debt service fund for a $100,000 bond principal and $15,000 interest payment.Subsequent payment of the principal and interest would include

Disclosures about long-term liabilities should be included in the notes to the financial statements to provide users with information about authorization of new debt issues,sale of previously authorized issues,and retirement and refunding of debt during the year.