Exam 5: Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

If taxes are levied specifically for payment of interest and principal on long-term debt, those taxes are recognized as transfers in for the debt service fund.

When bonds are sold to construct a capital asset through a capital projects fund, an entry would be made to debit Cash and credit Bonds Payable in the capital projects fund.

An annuity serial bond is one where the amount of the principal increases each year by the same amount that the interest payments decrease.

How would the $3,990,000 be accounted for?

Premiums generated from the issuance of bonds for a capital projects fund are generally:

Which of the following statements is true?

Which of the following funds typically record budgets?

What amount would be reported as debt service expenditures in the year ended June 30, 2017?

Unmatured principal installments and accrued interest which is due shortly after year end are required to be reported as liabilities in the debt service fund at year end.

Capital outlay expenditures of capital projects funds will typically result in additions to the general fixed assets reported in the governmental fund Balance Sheet.

How would the government account for the unused bond proceeds?

A construction contract was issued for an addition to the county jail in the amount of $2,300,000. When the project was approximately half finished, the contractor submitted an invoice for payment of $1,150,000. Which partial entry below is not required to record this transaction?

Which of the following bond types has a payment schedule in which the amount of annual principal repayment is scheduled to increase each year by approximately the same amount that interest payments decrease?

The following description provides the best definition for which fund: Accounts for resources that are legally restricted and both earnings and principal may be used to support government programs.

Interest revenues should be accrued at year-end on investments held by a permanent fund.

During the fiscal year ended December 31, 2017, the City of Johnstown issued 6% general obligation serial bonds in the amount of $2,000,000 at 102 $2,040,000) and used $1,980,000 of the proceeds to construct a fire station. The $40,000 premium was transferred to a debt service fund. The $20,000 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, 2017 and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1, 2018. -How would the $40,000 premium be accounted for?

Which of the following projects would normally be accounted for in a capital projects fund?

The City of Little River had the following transactions related to the construction of a new courthouse. a) 1/2/2017: 20 year 6% General Obligation Serial Bonds with a face value of $3,000,000 are issued at 101. Interest payments are made on Jan. 1 and July 1 of each year. The premium was transferred into the Debt Service Fund. The General Fund will fully fund each payment as they become due. b) 3/1/2017: Land is purchased for a new park at a cost of $ 175,000. c) 3/1/2017: A contract is signed for landscaping and construction of various structures in the park in the amount of $ 2,600,000. d) 6/15/2017: $165,000 is transferred from the General Fund for the 7/1 payment due on the courthouse fund serial bonds. e) 7/1/2017: Interest $90,000) and principal $75,000) are paid on the courthouse fund serial bonds. f) 12/1/2017: Receive an invoice for progress completed to date on the courthouse construction project in the amount of $1,716,000. g) 12/27/2017: $87,750 is transferred from the General Fund for the 1/1/10 interest payment due on the courthouse fund serial bonds. Interest is accrued as of 12/31/2017, following the exception permitted by GASB. Required: Prepare a Statement of Revenues, Expenditures and Changes in Fund Balance for the Capital Projects and Debt Service Funds. Assume this is the first year for each fund beginning fund balances are zero) and the City has no other long-term debt than that described above. Use separate columns for the two funds

With respect to Debt Service Funds, which of the following isnot correct?

When a payment is due to a contractor from capital projects fund resources, the debit would be to: