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

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

The Town of Windsor issued the following during the year: (1)$600,000 in bonds for the installation of street lights,to be assessed against properties benefited,but secondarily backed by the town; (2)$800,000 in bonds for construction of a public golf course to be paid from fees collected from golf course users.How much should be accounted for through debt service funds for payments of principal over the life of the bonds?

Explain the essential differences between regular serial bonds,deferred serial bonds,annuity serial bonds,and irregular serial bonds.How do regular serial bonds differ from term bonds?

On June 1,2018,Brooktown levied special assessments in the amount of $500,000,payable in 10 equal annual installments beginning on June 30,2018.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 1,2018 would include:

Which of the following is a statement regarding in-substance defeasance of bonds?

When Sunny City makes its annual lease payment on an unpaid capital lease obligation,the journal entry for the debt service fund accounts will include:

Which of the following debt service fund accounts would not be closed at the end of each fiscal year?

The issuance of general long-term bonds is reported in the fund receiving the proceeds and in the business-type activities column of the government-wide statements.

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

The City of Spartan's fiscal year ends on December 31.On October 1,2017,the city issued $1,000,000 of 6%,10-year term bonds with semi-annual interest payments due on March 1 and October 1 each year,beginning on April 1,2018.What amount of expense should the city recognize in its governmental activities journal for the years 2017 and 2018?

Typically,proceeds from general obligation bonds will be recorded in the:

Pollution remediation obligations should be recognized if which of the following obligating events has occurred?

Which of the following assets would not be found in the balance sheet of a debt service fund?

A debt service fund is a:

The City of Spartan's fiscal year ends on December 31.On October 1,2017,the city issued $1,000,000 of 6%,10-year term bonds with semi-annual interest payments due on March 1 and October 1 each year,beginning on April 1,2018.What amount of expenditures should the city recognize in its debt service fund for the years 2017 and 2018?

A government's MD&A states that government-wide net position decreased as a result of the issuance of a long-term liability during the current reporting period.Does this sound correct? How does the issuance of long-term debt typically affect net position in the year of issuance?

The following key terms from Chapter 6 relate to accounting for general long-term liabilities and debt service: A.Legal defeasance B.Regular serial bonds C.In-substance defeasance D.Irregular serial bonds E.Debt limit F.Annuity serial bonds G.Debt margin For each of the following definitions,indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition. _____ 1.A transaction in which cash or other assets are placed into an irrevocable trust for the benefit of debt holders _____ 2. Bonds for which the amount of annual principal repayments is scheduled to increase each year by approximately the same amount that interest payments decrease _____ 3. Bonds payable in which the total principal is repayable in a specified number of equal annual installments _____ 4. The maximum amount of gross or net debt that is legally permitted _____ 5. A transaction in which debt is legally satisfied based on certain provisions in the debt instrument even though the debt has not been repaid

Which of the following statements is not for debt service funds?

Debt service funds are used to account for which of the following?

General long-term liabilities are those that arise from activities of governmental funds as well as those reported as fund liabilities of a proprietary or fiduciary fund.